When are the German Factory Orders and how could they affect EUR/USD?
German Factory Orders overview
German factory orders are forecasted to have risen by 0.6% month-on-month in December, having dropped by 1.3% in November. The annualized figure is expected to come in at -6% compared to the previous month's -6.5%. The data will be released at 07:00 GMT.
Mixed lead indicators
IHS Markit’s German Purchasing Managers’ Index (PMI) for manufacturing, which accounts for about a fifth of the economy, fell to 43.7 in December from November’s five-month high of 44.1, signaling a deeper contraction.
However, the forward-looking survey measures for new orders and output expectations had improved.
So, Factory Orders may have rebounded in December, as expected by economists.
Impact on EUR
EUR/USD found acceptance under 1.10 on Wednesday – it's first below-1.10 close since October. The psychological support was breached with a red marubozu candle, which represents strong bearish sentiment.
The pair, therefore, is on the defensive and could suffer a deeper drop to 1.0941 (Oct. 8 low) on weaker-than-expected German data.
A big beat on expectations could put a strong bid under the single currency, although the bearish outlook would be invalidated only if the spot manages to close above Wednesday's high of 1.1048.
At press time, EUR/USD is trading just below 1.10.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
