According to wave count on larger timeframes AUD/USD is moving within wave C of daily degree (colored royal blue in the chart). Within this wave there’s a set of 5 waves of smaller degree – colored red in the chart. Wave 5 in its turn consists of A-B-C subwaves (colored orange red).
The targets of the downmove are Fibonacci expansions off 1.0182-0.9727-0.9956 (daily A-B waves), 0.9956-0.9711-0.9855 (waves 1-2), 0.9855-0.9587-0.9701 (waves 3-4), 0.9701-0.9546-0.9630 (subwaves A-B within wave 5).
Supports:
– 0.9535-34 = confluence area of two contracted objective points (COP’s)
– 0.9501 = objective point (OP)
– 0.9475 = OP
– 0.9459 = expanded objective point (XOP)
– 0.9433 = OP
– 0.9379 = XOP
If the price moves up for a correction the nearest resistances will be retracements of the wave down from 0.9703 – this wave is not developed yet.
Overbought/Oversold
The peaks of the Detrended Oscillator are converging around the zero level which shows the choppy character of the downtrend. Therefore, assuming that it is still down, deep retracements are needed to initiate shorts. One of the areas to watch is the overbought – 15-25 pips to go.
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