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

German/ Eurozone flash PMIs Overview

Friday's economic docket highlights the release of the flash version of Eurozone PMI prints, scheduled during the early European session. The German and the composite Eurozone PMI hold more relevance in terms of their impact on the shared currency.

The Germany Manufacturing PMI, due at 073:0 GMT, is anticipated to have eased from a record high level of 66.6 to 65.8 in April. The gauge for the services is also expected to slow a bit to 50.8 from 51.5 in March, though remain in the expansion territory for the second straight month.

Separately, the Eurozone flash manufacturing PMI (due at 08:00 GMT) is foreseen at 62 April, down from 62.5 in the previous month. The Eurozone services sector PMI is likely to show a contraction for the eights straight month and fall to 49.1 from 49.6 in March.

How could they affect EUR/USD?

The preliminary estimates will offer fresh insight into how the region's economy is performing amid the pandemic-related challenges. Given the market expectations for a modest slowdown, surprisingly stronger readings would bound well with the ECB's optimism about a strong economic recovery and push the euro higher into the end of the week. Conversely, weaker PMIs could send the EUR/USD pair tumbling lower below the key 1.2000 psychological mark.

Valeria Bednarik, Chief Analyst at FXStreet offered a brief technical outlook for the major and explained: "The near-term picture is bearish, as the pair is extending its decline below a 20 SMA that has lost directional strength. The longer moving averages remain well below the current level, and with the 100 SMA advancing above the 200 SMA."

"Technical indicators, on the other hand, hold within negative levels, with the Momentum aiming to recover but the RSI heading south around 45. Another leg south should be expected on a break below the 1.1990 region, where the pair met intraday buyers several times this week," Valeria added further.

Key Notes

  •  EUR/USD Outlook: Bulls have the upper hand above 1.2000, Eurozone PMIs eyed

  •  EUR/USD defends 1.2000 ahead of PMI data, ECB’s Lagarde

  •  EUR/USD now focuses on 1.1965 – UOB

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.