AUD/USD keeps losses as China’s PPI growth slows to 3.3%

• The Aussie dollar is on the defensive, having charted a bearish RSI divergence earlier today.
• China producer price inflation (PPI) or factory-gate price growth slowed more than expected in October.

The AUD/USD is currently trading at 0.7250, representing a 0.10 percent drop on the day, and may drop further on bearish technical setup and dismal China inflation data.

The currency pair charted a bearish divergence of the 4-hour chart relative strength index (RSI) earlier today as it dropped close to 50 pips from the high of 0.73. As a result, the pair could remain on the defensive in the next few hours.

More importantly, the bearish technical setup has likely been bolstered by a weaker-than-expected China PPI release. The October factory-gate inflation gauge came-in at 3.3 percent, missing the estimated print of 3.4 percent and down from the previous month’s reading of 3.6 percent.

It is worth noting that a pick-up in China PPI back in mid-2016 had triggered the great reflation trade, helping the commodity dollars like the AUD stage a solid rally against the greenback.

AUD/USD Technical Levels