EUR/USD: China Caixin Services PMI and risk-on fails to draw bids

• EUR/USD trades in the red near 1.1820 at press time versus 1.1856 in early Asia. 
• China's service sector PMI bettered estimates by a big margin. 
• Asian stocks cheer signs of continued recovery in China but fail to inspire USD bears. 

EUR/USD remains depressed on Thursday with dollar bears sitting on the fence despite upbeat China Caixin Services PMI and risk-on action in the Asian stocks. 

China PMI beats estimates

China's service sector expanded for the fourth straight month in August, the data released during the Asian trading hours showed.  

While the Caixin Services Purchasing Managers' Index (PMI) slipped to 54.00 in August from 54.1 in July, the actual figure bettered the estimate of 54.00 by a significant margin. 

The PMI indicates a continued recovery in the world's second-largest economy and is powering gains in the Asian stocks. As of writing, major Asian indices like Japan's Nikkei and the Shanghai Composite are flashing green. 

Improved risk appetite usually pushes the anti-risk greenback lower. For instance, the dollar index fell from 102.99 to 92.75 in 5-1/2-months to Sept. 1, as the US stocks charted a V-shaped recovery from the coronavirus crisis lows to fresh record highs. 

However, the greenback is showing resilience on Thursday and keeping EUR/USD under pressure. The pair is currently trading at 1.1821, representing a 0.239 decline on the day. 

According to Marc Chandler, a former chief currency strategist for the giant British bank HSBC, corrective pressures are giving the greenback a reprieve. 

The negative Eurozone inflation could be another factor pushing EUR/USD lower, as discussed on Wednesday. 

The pullback will likely gather pace if the final German and Eurozone PMI readings, scheduled for release on Thursday, carry significant downward revisions to preliminary numbers. The focus would also be on the Eurozone Retail Sales figure for July and the US Trade Balance. 

Technical levels