FXStreet (Mumbai) - Risk-off sentiment extends into Asia for the third day in a row so far this week, with the yen absolutely in demand on the back of resurfacing China slowdown fears. While the Antipodes remain heavy on the back of reduced appetite for risker/higher yielding assets. Key headlines in Asia South Korean President Park calls a National Security Council meeting Today's PBOC USD/CNY fix was highest since April 2011 China's Caixin Dec services PMI: Slowest increase in 17 months Dominating themes in Asia – centered on JPY, AUD and NZD The ‘flight to safety’ theme dominates Asia, as investors run for cover on the back of renewed selling in the Asian stocks, after the Chinese central bank, PBOC devalued yuan to its weakest since April 2014. Moreover, poor Chinese services PMI report published by Caixin this morning added to the ongoing weakness in the economy and dampened the sentiment around the higher yielding assets. The Caixin China Services PMI fell to 50.2 in Dec from 51.2 previous, coming in much weaker than the market forecast of 52.3 and hit 17-month low. As a result, the AUD/USD pair was hammered to 0.71 handle on escalating China slowdown fears. While its OZ neighbour, the NZD, was also sold-off heavily below 200-DMA placed 0.6683 and now wavers around 0.6650 levels, down -0.74% on the day. On the other hand, the yen emerged the best former and the winner across the FX board, with the safe-haven appeal of the Japanese currency boosted on wide-spread risk-aversion. At the moment, the USD/JPY pair drops -0.30% to 118.68. On the equities space, Asian indices extend losses, with Japan’s benchmark, the Nikkei taking -1.16% to 18,162. Australia’s S&P/ASX extends the drop to 5,125, recording a 1.13% loss so far. The Chinese equities stabilized on news that China kept the ban on short-selling in place and also on further yuan devaluation. The mainland China’s benchmark, the Shanghai Composite gains 0.69% higher at 3,310, while China’s A50 index trades marginally higher at 10,188. Heading into Europe and North America There is nothing much of relevance in terms of economic news in the EUR calendar today, except for the second-line of releases viz., final services PMI readings from across the Euro area economies. However, the UK services PMI report is expected to remain the main highlight in the upcoming session. The UK services PMI in December is seen ticking down to 55.8 from the 55.9 booked in the previous cycle. Looking ahead, we have an eventful US session with plenty of risk events in store, including the ADP jobs, ISM services PMI, trade balance and factory orders data. Although the FOMC Dec 16 meeting minutes is likley to hog the limelight ahead of Friday’s payrolls data. EUR/USD Technicals Valeria Bednarik, Chief Analyst at FXStreet explained, “In the 1 hour chart, the price remains well below a bearish 20 SMA, whilst the technical indicators have resumed their declines after correcting extreme oversold readings. In the 4 hours chart, the technical indicators are posting tepid bounces from extreme oversold readings, but the price has declined further below its moving averages. The daily low converges with the 61.8% retracement of the December rally, which means a break below it is no required to confirm additional declines, eyeing a 100% retracement towards the 1.0500 level later this week. Support levels: 1.0710 1.0660 1.0625 Resistance levels: 1.0780 1.0810 1.0845.” For more information, read our latest forex news.