The Australian dollar could be on the verge of a bigger slump into the turn of the year.
AUD/USD dropped to a near six-week trough on Thursday, undermined by a slide in oil and other commodity prices.
It has also struggled due to the Reserve Bank of Australia's push back against bets for 2022 interest rate hikes earlier in the week, with wage inflation data on Wednesday doing nothing to boost the case for tighter policy. nL4N2S84AT
This week has seen AUD/USD break under the 0.7278 Fibonacci level, a 61.8% retrace of the 0.7107 to 0.7555 2021 recovery move. A weekly close under the 0.7278 Fibo would add considerably to the downside risk, which would likely see a spiral lower to retest the September 0.7171 low.
Fourteen-week momentum is on course to register a more negative reading at the end of this week than last week, which would further reinforce the medium-term bearish market structure.
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