AUD/USD has finished wave 1.0204-1.0580 (wave C of medium term uptrend - colored royal blue in the chart) and now is developing corrective wave 4. Within this wave there are A-B-C subwaves (colored red in the chart) with subwave C still in development. To confirm subwave C break below 1.0389 is needed. The targets of the downmove are Fibonacci retracements of 1.0285-1.0580, 1.0204-1.0580, and expansions off 1.0580-1.0389-1.0521.
Supports:
- 1.0403 = contracted objective point (COP)
- 1.0398-92 = confluence area of .618 and .50 retracements, already achieved
- 1.0348 = .618 ret
- 1.0330 = objective point (OP)
If the price reverses up the immediate resistances will be Fibonacci expansions off 1.0389-1.0521-1.0428.
Resistances:
- 1.0510 = COP
- 1.0560 = OP
Overbought/Oversold
Assuming that the medium term trend is down, it's preferable to look for shorts when the Detrended Oscillator goes above the zero level (current prices) or gets into the overbought area (5-20 pips to go).
Read more on how to apply Fibonacci studies to calculate price targets.
