Chinese stocks plummeted at the beginning of the year, as the latest PMI figures continue signaling an economic slowdown in the second largest world's economy. After the official manufacturing data came out worse than expected during the weekend, the Chinese Caixin manufacturing PMI for December resulted at 48.2 at the beginning of this Monday, below the 48.9 expected and the tenth straight monthly contraction.
China halted stocks' trading for the rest of the day after losses reached 7%, spurring risk aversion all through the financial world. European indexes opened sharply lower, with the German DAX gapping lower over 300 points and extending its decline further afterwards. The EUR is higher by reflex, following the decline in local equities, while safe havens yen and gold are also sharply higher. Europe is releasing its local PMIs figures, generally positives for December, with German manufacturing at 53.2 from a previous 53 and the EU reading resulting at 53.2 against 53.1 expected.
View the Live chart of the EUR/USD
In the meantime, the EUR/SUSD pair advanced up to 1.0945 but was unable to sustain gains and retreated from the level, although keeps trading above the 1.0900 mark. Technically speaking, the upward potential is still seen limited as the 4 hours chart shows that the technical indicators have advanced up to their mid-lines within negative territory before losing bullish strength, while the price is barely above a bearish 20 SMA.
The immediate support, however, comes at 1.0880, and it will take a break below it to see the pair extending its decline down to the 1.0840 region. Above the mentioned daily high on the other hand, the pair can extend up to the 1.1000 level, where selling interest is expected to contain the rally.
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