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Euro traders, huddle up! There are a few red flags lined up in the eurozone for tomorrow and these might spur large moves across the forex charts.

Lemme give y’all a quick look at what’s in store so you can make the necessary adjustments with your trades.

1. Flash PMI readings

First up, we’ve got a slew of PMI readings coming from Germany, France, and the entire euro region.

In case you’re wondering, PMI stands for purchasing managers index, which takes various business indicators such as employment, inventories, output, and new orders into account and wraps ’em up in one neat figure.

A reading above 50.0 indicates that the industry, whether it’s manufacturing or services, expanded during the month while a reading below 50.0 reflects industry contraction.

France, which is the euro zone’s second-largest economy, is set to get the ball rolling at 7:00 am GMT with its flash PMIs for August.

Its manufacturing PMI is expected to climb from 48.3 to 49.2, indicating a slower pace of industry contraction, while its services PMI is projected to climb from 50.6 to 50.9, reflecting a faster pace of industry expansion.

Germany, the region’s top economy, will print its own figures by 7:30 am GMT. Its manufacturing PMI is slated to dip from 53.3 to 52.8 while its services PMI is estimated to drop from 54.9 to 54.5 in August.

Markit Euro Zone PMI and GDP

Overall, the euro zone’s flash manufacturing PMI is projected to tick down from 52.3 to 52.2, and its flash services PMI is expected to fall from 54.4 to 54.1.

Based on data compiled by Markit, the eurozone PMI readings tend to be a good estimate of how the region’s overall economic performance might turn out.

With that, larger declines would mean that the slowdown in these industries was worse than expected, leading forex junkies to speculate that the ECB might move closer to giving the green light on further monetary policy easing.

On the other hand, stronger than expected data could keep the shared currency supported in the meantime.

2. ECB Governor Draghi’s testimony

Another potential market-mover for euro pairs tomorrow is ECB head honcho Mario Draghi’s testimony at 1:00 pm GMT.

As the head of the region’s central bank, Draghi has a huge say when it comes to their monetary policy bias so forex market participants pay particularly close attention to his testimonies.

You never know if he’s gonna drop strong clues on what the ECB has up its sleeve!

Besides, Draghi already dropped a bombshell on the markets earlier in the month when he said that the ECB is open to further easing if necessary.

During his official statement, Draghi pointed out that the region’s economic recovery is moving at a weaker pace than initially expected, partly due to the slowdown in China and emerging nations.

He even announced downgrades in growth and inflation forecasts, emphasizing that the ECB has plenty of easing tools at their disposal in case the situation worsens.

Super Mario is expected to highlight these same points in his upcoming testimony, probably adding a few more remarks on the region’s disappointing CPI readings and the potential repercussions of Fed tightening on global growth.

Dovish remarks reminding market watchers that the ECB is ready to ease could send the euro tumbling against its forex counterparts while reassuring comments could keep losses in check.

There you have it, ladies and gents! Quite an exciting day ahead, eh? If you’re not comfortable about leaving your account exposed to such risks, there’s no shame in closing out your open euro positions and sitting on the sidelines while watching the events play out.

But if you’re gutsy enough to get a piece of the action, just be sure to practice proper risk management at all times. Good luck and good trading!