When are the German/ Eurozone flash PMIs and how could they affect EUR/USD?

German/ Eurozone flash PMIs Overview

Friday's Eurozone economic docket highlights the release of the German and Eurozone PMI prints for August. The flash version of the German Manufacturing PMI is scheduled for release at 07:30 GMT and is expected to improve further to 52.5 from July's final reading of 51. Conversely, the index for the services sector is expected to retreat to 55.1 in August from 55.6 last.

Meanwhile, the Eurozone flash manufacturing PMI (scheduled at 08:00 GMT) is expected to rise to 52.9 in August from the 51.8 recorded in the previous month. Separately, the Eurozone services sector PMI is seen easing to 54.5 in the reported month from 54.7 previous.

How could they affect EUR/USD?

Given that the European governments have already taken decisive action on stimulus measures to support economic growth, a stronger-than-expected reading might provide an additional boost to the shared currency. This, in turn, will set the stage for the resumption of the EUR/USD pair's recent bullish trend, setting the stage for a move back towards the 1.1940-50 supply zone. Some follow-through buying should pave the way for a move to reclaim the key 1.2000 psychological mark.

Alternatively, the market reaction to disappointing reading is likely to remain limited amid the prevalent selling bias around the US dollar. Hence, any meaningful pullback might still be seen as a buying opportunity near the 1.1800 round-figure mark.

Key Notes

   •  EU Markit PMIs Preview: Coronavirus overshadows data

   •  EUR/USD Forecast: Seems poised to resume bullish trend, Eurozone PMIs in focus

   •  EUR/USD: Buyers defend 1.18 handle ahead of German PMI

About German/ Eurozone flash PMIs

The Manufacturing Purchasing Managers Index (PMI) released by the Markit Economics captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the manufacturing PMI is an important indicator of business conditions and the overall economic condition in the Euro Zone. Usually, a result above 50 signals is bullish for the EUR, whereas a result below 50 is seen as bearish.