The Australian dollar declined in the Asian session after weaker-than-expected data from China. The data showed that manufacturing activity continued to contract in January. The Caixin manufacturing PMI was at 48.3, which was lower than the expected 49.5. It was also lower than December’s 49.7. A PMI data below 50 is viewed as an indicator of contraction. This data comes a day after the China Logistics Information Center released manufacturing PMI data that showed activity at 49.5. Later today, investors will receive the PMI numbers from Germany, UK, US, Switzerland, and the European Union.

It will be an important day for the markets as the United States releases the jobs numbers for January. The numbers are expected to show that non-farm Payrolls increased by 165K during the month. This will be much lower than December’s growth of 312K. The unemployment rate is expected to remain at 3.9% while the private non-farm payrolls are expected to be at 170K. The average weekly hours and earnings are expected to remain unchanged at 34.5 and 3.2% respectively. At the same time, investors will receive the ISM manufacturing PMI, which is expected to show a reduction to 54.2.

Investors will continue to watch the progress on the US-China trade talks. Yesterday, the US President met with China’s vice premier, Liu He, who visited him at the White House. The two sides said that progress was still being made. Another meeting between the US and China is still being considered. While investors are optimistic that a deal will be made, there are still many issues such as intellectual property and forced technology transfer that could make this impossible.

EUR/USD

The EUR/USD pair declined from Wednesday’s highs to a low of 1.1435. On the four-hour chart, the pair is trading slightly below the 20-day EMA but higher than the 40-day EMA. The MACD indicator too has started dropping from Wednesday’s high while the momentum indicator has dropped to below the 100 level. Today, the pair’s price will depend on the US jobs numbers. Numbers that meet the analysts estimates will likely take the pair higher.

AUD/USD

The AUD/USD pair declined after weaker-than-expected numbers from China. The pair declined to a low of 0.7235, which is lower than Wednesday’s high of 0.7295. On the hourly chart, the pair is below the 20-day and 40-day EMA. It is also between the 100% and 61.8% Fibonacci Retracement level. There is a possibility that the pair will continue moving lower to the 0.7210 level, which is the 61.8% Fibonacci level and the 100-day EMA before it resumes the upward trend.

USD/JPY

Yesterday, the USD/JPY pair declined to a low of 108.5. This level was an important support level as shown below. Overnight, the pair was little moved as traders waited for data from the US. It is now trading at the 108.85 level, which is along the short and medium-term EMAs. The RSI too has remained neutral at the 47 level. There is a possibility that the pair will be unmoved today until the US jobs numbers.