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  • 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


       Last Price:  0.7249
       Daily change:  -5.0  pips
       Daily change:  -0.0689%
       Daily Open:  0.7254
       Daily SMA20:  0.7136
       Daily SMA50:  0.716
       Daily SMA100:  0.7266
       Daily SMA200:  0.7474
       Daily High:  0.7304
       Daily Low:  0.7246
       Weekly High:  0.726
       Weekly Low:  0.705
       Monthly High:  0.724
       Monthly Low:  0.702
       Daily Fibonacci 38.2%:  0.7268
       Daily Fibonacci 61.8%:  0.7282
       Daily Pivot Point S1:  0.7233
       Daily Pivot Point S2:  0.7211
       Daily Pivot Point S3:  0.7175
       Daily Pivot Point R1:  0.729
       Daily Pivot Point R2:  0.7326
       Daily Pivot Point R3:  0.7348