China's manufacturing PMI, released earlier today showed a contraction indicating that activity in the manufacturing sector slowed down sharply in the month of August. The manufacturing PMI was 49.7, below estimates of 49.8 and down from 50 previously. Simultaneously, the Caixin final manufacturing PMI printed a soft number of 47.3. A PMI reading below 50 indicates a contraction in the sector, which in this case happens to be the manufacturing sector. With exports being a major part of the Chinese economy, the markets were cautious after the soft print. However, considering that last month China devalued the Yuan in a bid to boost the exports, there is a bit of optimism that the manufacturing sector will pick up sooner than later. The cautious sentiment in the market was well reflected in USDJPY which is showing a bearish reversal pattern to be further confirmed if today’s price closes bearish.