AUD/USD broke above 1.0386 and switched the trend to the bullish. As far as the wave structure is concerned, the pair is moving within impulse wave C of medium term uptrend (colored mangenta in the chart) that started from 1.0231. Notice that it is almost precisely 0.618 Fib support calculated from wave A 1.0145-1.0377.
Wave C that is developing now has its subwaves (colored orange red and yellow in the chart) - A, B, C, and still smaller A, B, and C that is developing from 1.0302 - the one that broke above 1.0386. A-B-C cycles are the waves we calculate Fibonacci expansions off.
The targets above are Fibonacci expansions off 1.0145-1.0377-1.0231, 1.0231-1.0333-1.0254, 1.0254-1.0337-1.0302.
Resistances:
- 1.0419 = expanded objective point (XOP)
- 1.0436 = XOP
- 1.0463 = objective point (OP)
Since the trend is bullish we are interested in supports, that can be used as our long entries. However now, as the wave up is not yet developed, we can not calculate any supports until the price reverses down considerably enough to project Fib retracements from the wave that started at 1.0231.
Overbought/Oversold
The larger wave is now moving up, therefore it's preferable to try long positions when the Detrended Oscillator goes below the zero level (25-30 pips below the current prices) or into the oversold area (50-65 pips below the current prices).
