EUR Update: Soft PMIs on the Horizon

EUR: Another batch of soft PMIs?

Before ECB President Christine Lagarde's speech on Friday, the highlight in the eurozone this week will be Wednesday's release of flash PMIs for August. Currently, gloom is descending on the European outlook, including the re-introduction of Germany's description as the 'sick man of Europe'. Let's see whether the manufacturing PMIs deteriorate any further and also whether services PMIs cross decidedly into sub-50 territory.

EUR/USD is starting to look quite comfortable below 1.09 and below support at 1.0835/45 could make a dip down to the 1.0775 area. Certainly, with US Treasury yields pushing ahead and proving a threat to risk assets – and China still fragile – EUR/USD will struggle to make it back above the 100-day moving average at 1.0930.