When are the German Factory Orders and how could they affect EUR/USD?
|German Factory Orders overview
The German data, scheduled for release at 06:00 GMT, is expected to show the Factory Orders increased at a seasonally adjusted rate of 0.5% month-on-month in June, having dropped 2.2% in the preceding month.
In annualized terms, Factory Orders are forecasted to drop 7% in June following an 8.6% slide in May.
Manufacturing sector contracted in June
Germany's export-dependent manufacturing sector contracted in June for the sixth time in a row as weak external demand weighed over new orders, according to IHS Markit’s Purchasing Managers’ Index (PMI) for manufacturing.
That said, the rate of decline in new orders eased for the third straight month in June. Further, future expectations returned to positive territory in June.
So, Geman Factory Orders may have registered a moderate rise in June.
Impact on EUR/USD
EUR/USD is looking north ahead of German Factory Orders data, having charted a bullish hammer reversal on the daily chart earlier this week.
A big-beat on German Factory Orders data would bolster the bullish technical setup and allow a quick move to 1.1250. On the other hand, a big miss on expectations could yield a drop to 1.1180.
As of writing, the EUR/USD pair is trading at 1.12. The pair has pulled back to the psychological support, as expected, having hit a high of 1.1250 earlier today.
About German Factory Orders
The Factory orders released by the Deutsche Bundesbank is an indicator that includes shipments, inventories, and new and unfilled orders. An increase in the factory order total may indicate an expansion in the German economy and could be an inflationary factor. It is worth noting that the German Factory barely influences, either positively or negatively, the total Eurozone GDP. A high reading is positive (or bullish) for the EUR, while a low reading is negative.
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