AUD/USD technical analysis: Aussie may end five-day winning streak
|- AUD/USD 4-hour chart is reporting bearish divergence of key indicators.
- China's factory deflation deepened in August, Aussie business confidence deteriorated.
- AUD/USD could suffer a deeper pullback to levels below 0.6840 and snap its five-day winning streak.
AUD/USD's five-day winning streak may end, as key technical indicators have diverged in favor of the bears.
For instance, the moving average convergence divergence histogram has crossed below zero on the 4-hour chart, having produced lower highs as opposed to higher highs on AUD/USD in the last few days.
The 4-hour chart relative strength index (RSI) is also reporting a bearish divergence.
Further, bearish technical developments are backed by signs of worsening economic slowdown in China - the country's factory deflation deepened in August, according to the producer price index released at 01:30 GMT.
Meanwhile, the National Bank of Australia also reported a drop in the business confidence and business conditions index in August.
The pair, therefore, risks falling to the 4-hour chart support at 0.6836 and could end the day on a negative note for the first time since Sept. 2.
As of writing, AUD/USD is trading at 0.6854, having hit a high of 0.6870 before the release of China's inflation data at 01:30 GMT.
4-hour chart
Trend: Deeper pullback likely
Pivot points
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