German factory orders rose 0.3% month-on-month in October, having risen by 1.3% in the preceding month, the official data, due at 07:00 GMT, is expected to show.
Factory orders are seen falling 6.1% in annualised terms, having dropped 5.4% in September.
Lead indicators point to weakness
IHS Markit’s Purchasing Managers’ Index (PMI) for manufacturing ticked higher to 42.1 in October from September's reading of 41.7, but remained well below 50, signaling ninth straight monthly contraction.
More importantly, the new orders fell for the 13th consecutive month and factories shed jobs at the fastest pace in almost 10 years.
All in all, factory orders are unlikely to have registered a growth in October.
Impact on EUR/USD
EUR/USD will likely face selling pressure if the data prints below estimates of 0.3% month-on-month growth.
Note that the pair is already looking heavy, having created a candle with a long upper shadow on Wednesday.
However, if the German data unexpectedly blow past expectation, the single currency would find love. That said, a bullish breakout would be confirmed only if the pair finds acceptance above the Nov. 21 high of 1.1097.
Post-factory orders data, the pair will be at the mercy of the broader market sentiment, the Eurozone Q3 GDP data, due at 10:00 GMT and the US factory orders scheduled at 15:00 GMT.
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.