• A subdued pullback in the EUR/USD pair may turn into a fresh bearish impulsive wave sooner.
• A downbeat release of Germany's PMI will strengthen the odds of a recession.
• Germany's Manufacturing PMI is declining consecutively since February this year.

The EUR/USD pair is attempting to build a base around 0.9940 after a vertical decline on Monday. The major has auctioned in a narrow range of 0.9933-0.9950 in the Asian session but is likely to deliver a downside break on lower expectations for Germany’s PMI data. On Monday, the asset recorded severe losses after losing the magical figure of 1.0000.

According to the preliminary estimates, the German S&P Global/BME Manufacturing PMI data will land at 48.3, lower than the prior release of 49.3. Also, the Services PMI is seen downbeat at 49 vs. the former print of 49.7. It is worth noting that Germany is a core member of the European Union (EU) and declining Germany PMI will have a significant impact on the shared currency.

Also, investors should be aware of the fact that the Manufacturing PMI is declining consecutively since February this year. And more downside in the economic data would bolster the odds of a recession in Germany. Apart from that, Russia will halt natural gas supplies to Europe for three days in August to run the unscheduled maintenance under the Baltic Sea to Germany. The unexpected natural gas supply cut to Germany from Nord Stream 1 pipeline will accelerate the imbalance of the energy demand-supply mechanism and may drag the shared currency.

On the dollar front, the US dollar index (DXY) is displaying a subdued performance in the Asian session. The asset is expected to remain sideways ahead of the US PMI data. As per the estimates, the S&P Global Manufacturing PMI will land at 51.5, lower than the prior print of 52.2. Contrary to that, the Services PMI will improve substantially to 49.1 vs. the former figure of 47.3.