Hello, I hope this is a correct sub for this kind of question.
I was reading a wiki about all friendly fire incidents and seen multiple instances of allies using yellow smoke signal to indicate friendlies.
Now I was wondering if Germans used same colour as default? If not, did they use yellow to "trick" enemies? Could they just easily trick the air force to fly away by popping a yellow smoke?
Whilst the US possessed the M18 smoke grenade in a variety of colours, the German Wehrmacht did not have coloured smoke grenades to the best of my knowledge.
Indeed, when the US intelligence service "Tactical and Technical Trends" publication reported on the German use of smoke, it makes no mention of signalling purposes or colours.
Instead, the Germans used flare pistols for signalling purposes. The Leuchtpistole was a single-shot 26,65mm tipping-barrel flare pistol, issued with a lanyard, holster, and pouch containing 18 flares. It was commonly issued to platoon leaders, or men on guard duty. Illumination and signal flares were available, the latter in single star or double star configuration, both in red and green.
As for the specific protocol per colour, I have only been able to find one reference, relating to the bombing of Rotterdam.
The bombing of Rotterdam occurred as negotiations were taking place, and the crews of the bombers could not be reached by radio. Consequently, ground troops fired red flares to signal them to abort.
In short, the Germans used flares, not smoke, for signalling purposes. As to whether they may have captured American smoke grenades and used them as some sort of ruse de guerre, I cannot say.
Sources
Maschinenpistole 18I / 28II / Erma / 38 / 40 / 34 / Leuchtpistole by Schmitt, Eisenschmidt Verlag, Berlin 1940 (Manual for the flare pistol)
Mei 1940: De strijd op Nederlands grondgebied by Herman Amersfoort and Piet Kamphuis (Use in Rotterdam)