Eurozone PMIs Preview: Return to expansion territory to complete EUR/USD bullish week

Eurozone preliminary PMIs for July carry upbeat and reasonable expectations. While German Manufacturing PMI could dampen the picture, there is room for a positive surprise. Bulls are dominating in EUR/USD amid the EU agreement and optimistic vaccine news, as FXStreet’s analyst Yohay Elam notes. 

Key quotes

“In case all or almost all PMIs advance above 50, the euro would receive a tailwind that would help it advance. It would compound the historic EU recovery fund agreement that was reached on Tuesday and was probably not captured by the surveys.” 

“If too many indicators lag behind – especially the German Manufacturing PMI and the eurozone composite figure – EUR/USD has room to fall. This scenario seems unlikely.”

“If the actual outcome meets estimates there may be room to the upside for the currency pair. Apart from the upbeat news from Brussels, EUR/USD has risen amid dollar weakness. The safe-haven greenback suffered from selling pressure amid a plethora of reports related to progress in developing a coronavirus vaccine. Advances announced by AstraZeneca, Pfizer, Moderna, and Synargien have all indirectly kept EUR/USD bid.”