The AUD/USD developing corrective wave B against wave A (1.0199-0.9943) of the medium term downtrend - colored magenta in the chart. Within wave B there are subwaves A, B and C which is still developing (colored orange red in the chart). The targets of the upmove are Fibonacci retracements of 1.0199-0.9943 and expansions off 0.9943-1.0016-0.9969.
Resistances:
- 1.0071 = .50 retracement
- 1.0087 = expanded objective point (XOP)
- 1.0101 = .618 ret
If the price keeps declining the immediate supports will be Fibonacci retracements of 0.9943-1.0055, and expansions off 1.0199-0.9943-1.0055.
Supports:
- 1.0112 = .382 ret
- 0.9999 = .50 ret
- 0.9986 = .618 ret
- 0.9897 = contracted objective point (COP)
Overbought/Oversold
Assuming that the medium term trend is still down, but now a corrective wave is developing it's preferable to stand aside until the price hits a signifcant Fib resistance and then wait for signals to go short. The overbought area is 20-30 pips away from the current price which roughly corresponds to the previous peak at 1.0055.
Read more on how to apply Fibonacci studies to calculate price targets.
