German factory orders overview
The German data, scheduled for release today at 06:00 GMT today, are expected to show the factory orders increased at a seasonally adjusted rate of 1.5% month-on-month in March, having dropped 4.2% in the preceding month.
In annualized terms, factory orders are forecasted to drop 6.2% in March following an 8.4% slide in February. That would be the tenth consecutive monthly decline.
Data may disappoint expectations
The headline IHS Markit/BME Germany Manufacturing PMI had dropped sharply in March to 44.1, the lowest level since July 2012, from 47.6 in February. The deterioration was underpinned by a sharp and accelerated decrease in new orders, primarily the ones from abroad.
The slide in foreign demand may have once again weighed over factory orders. It is worth noting that the 4.2% slide in factory orders (the biggest since January 2017) registered in February was largely due to anemic external demand.
Put simply, the probability of the data missing expectations is high.
Impact on EUR/USD
A weaker-than-expected release could complicate EUR/USD's plans to re-test the resistance of the trendline connecting March 20 and April 17 highs.
As of writing, that trendline hurdle is seen at 1.237 and the EUR/USD pair is trading at 1.1206. The shared currency may pick up a strong bid and cut through the trendline resistance if factory orders better estimates by a big margin.
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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