When are the German Factory Orders and how could they affect EUR/USD?
|The German data scheduled for release at 06:00 GMT is expected to show factory orders, an important indicator for Europe’s biggest economy, fell for the third consecutive month in September.
The gauge is seen falling 6.2% year-on-year, having dropped 6.7% in August. Month-on-month, however, factory orders are forecasted to rise by 0.1%, having dropped by 0.6% in August.
Manufacturing recession deepened in September
IHS Markit’s Purchasing Managers’ Index (PMI) for Germany fell to 41.7 in September to register the lowest reading since 2009 and eighth straight monthly decline in output. The PMI stood at 43.5 in August. A reading below 50 indicates contraction.
Notably, new orders declined even faster, dropping to the greatest extent since April 2009, according to the official report.
If the lead indicator is a guide, the probability of factory orders disappointing expectations is high.
Impact on EUR/USD
EUR/USD is already operating on slippery grounds, having charted a bearish reversal candlestick pattern over the last two days.
Currently, the pair is trading near 1.1073 – the neckline support of a double top pattern on the daily chart.
A weaker-than-expected factory orders data will likely yield a convincing break below 1.1073, opening the doors for a deeper drop to 1.0966 (double top breakdown target as per the measured move method).
The EUR may pick up a bid if key data betters estimate. The technical outlook, however, would turn bullish only above 1.1180.
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.