After the big miss from China's manufacturing PMI earlier this week then today's services read was always going to gain a lot of attention. Now it sits precariously above 50 it will continue to be watched closely in the months ahead.
NZDJPY was the biggest mover, breaking below key support highlighted in today's video and currently sitting at a 64-session low. The Kiwi Dollar moved in lock-step with NZDJPY and currently sits at an 18-day low after breaking the 50day MA and respecting the 200day MA at the end of December to mark a significant swing high.
AUDUSD broke to an 11-session low but will likely find support above 71c as we approach FED minutes from December meeting overnight, and for it to stand any chance of breaking below 70c we would require strong data from the ISM non-manufacturing read tonight.
Key points from the PMI report:
- Business activity has fallen in four of the past five months
- The composite read (manufacturing and services combined) is at a record low of 49.4
- This is now the seventh straight decline in the composite to show the overall economy is contracting
- Prices for manufacturers and service providers continue to cut costs
- Service sector optimism remains low for the next 12 months
- New orders for the composite declined for the 2nd month