AUD/USD is holding below 1.0580 and now potential wave C of corrective cycle ABC is developing - colored royal blue in the chart. The targets of the downmove are Fibonacci retracements of 0.9709-1.0580, and expansions off 1.0580-1.0389-1.0578, 1.0578-1.0453-1.0519.
Supports:
- 1.0460 = contracted objective point (COP), already fulfilled (!)
- 1.0442 = COP
- 1.0394-87 = confluence area of two objective points (OP)
- 1.0317 = expanded objective point (XOP)
If the price reverses up the immediate resistances will be Fibonacci retracements of 1.0578-1.0453 and expansions off 0.9709-1.0313-1.0204 (waves 1-2), 1.0204-1.0580-1.0389 (waves 3-4), 1.0389-1.0578-1.0453.
Resistances:
- 1.0621 = COP
- 1.0642 = 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 (15-25 pips above the current prices) or gets into the overbought area (30-40 pips below the current prices - this roughly corresponds to 1.0501 Fib resistance).
Read more on how to apply Fibonacci studies to calculate price targets.
