EUR/USD logs longest daily losing streak in two months
|- EUR/USD has dropped for three straight days, the biggest losing streak since early September.
- German industrial production may miss estimates, according to lead indicators.
- Weak data will likely invite stronger selling pressure, as suggested by technical charts.
EUR/USD has charted the longest daily losing streak in two months ahead of the data in Germany, which is expected to show the factory activity contracted in September.
The currency pair closed 0.10% lower on Wednesday, having shed 0.33% and 0.48% on Monday and Tuesday, respectively. The three-day losing streak is the longest since early September. Back then, the pair had dropped for six straight days to Sept. 2.
At press time, the pair is trading at 1.1059, representing a 0.06% drop on the day. The technical outlook turned bearish with Wednesday's close below 1.1073, which confirmed a double top bearish breakdown on the daily chart.
Put simply, the pair is on the defensive ahead of a key macro data release.
Focus on German data
The data due at 07:00 GMT is expected to show the Industrial Production fell by 0.4% month-on-month in seasonally adjusted terms in September. The annualized figure is forecasted to print at -2.9% versus -4% in August.
Germany's manufacturing recession had deepened in September with the IHS Markit’s Purchasing Managers’ Index (PMI) falling to 41.7 in September to register the lowest reading since 2009.
Therefore, the probability of industrial production missing estimates is high. That would bolster the bearish technical setup, possibly yielding deeper losses in the common currency.
A big beat on expectations may bode well for the EUR. However, a strong close above 1.1073 is needed to invalidate the bearish setup.
Technical levels
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