The AUD/USD is moving in medium term downtrend and now is developing corrective wave 4 – colored red in the chart. The targets of the upmove are Fibonacci retracements of 1.0188-0.9960 (wave 3), 1.0139-0.9960 (subwave C within wave 3), and expansions off 0.9960-1.0032-0.9980.
Resistances:
– 1.0071-74 = confluence area of .618 and .50 retracements
– 1.0096-1.0101 = confluence area of expanded objective point (XOP) and .618 ret
– 1.0168 = super expanded objective point (SXOP)
If the price keeps declining the nearest supports will be Fibonacci expansions off 1.0199-1.0103-1.0189 (waves 1-2).
Supports:
– 0.9938 = SXOP
Overbought/Oversold
Assuming that the medium term trend is down, it’s preferable to use overbought readings of the Detrended Oscillator or its cross above the zero level to consider short positions. The Oscillator is now above the zero level and moving back from the overbought. Therefore now, since Fib resistances at 1.0047-50-52 have been hit, is the time to look for confirmation of topping signal and enter short.
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