The AUD/USD pair is developing the potential corrective wave B of the medium term uptrend (coral in the chart) from the point 1.0856. Within this wave there are subwaves A, B and C (royal blue in the chart). An impulse subwave C is developing from 1.0636. The latter comprises the subwaves A, and B (red in the chart); the subwave B is developing from 1.0336.
Now the downside targets are Fibonacci retracements 1.0423-1.0636, 0.9861-1.0856, and expansions 1.0856-1.0423-1.0636.
Supports:
- 1.0241 = .618 retracement
- 1.0236 = expanded objective point (XOP)
- 1.0203 = objective point (OP)
If the price reverses to the upside, the immediate resistances will be Fibonacci retracements 1.0636-1.0336.
Resistances:
- 1.0451 = .382 retracement
- 1.0486 = .50 ret
- 1.0521 = .618 ret
Overbought/Oversold
The bigger wave is now moving downwards, so it is prefereable to go short when the Detrended Oscillator goes above the zero level (15-20 pips above the current prices) or into the overbought area (35-45 pips above the current prices). Mind the possibilities of opening the short positions at or near the indicated resistances.
