Eurozone's manufacturing powerhouse Germany will publish Industrial Production figures for the month of July at 06:00 GMT.
The data is expected to show the factory activity expanded at a seasonally adjusted rate of 0.3% month-on-month in July, having dropped 1.5% in the preceding month.
Lead indicators point to weakness
German factory orders or contracts for goods ‘Made in Germany’ fell 2.7% month-on-month and 5.6% year-on-year in July.
Meanwhile, the headline IHS Markit/BME Germany Manufacturing PMI had dropped to a seven-year low of 43.2 in July, mainly due to the steep drop in new export orders since 2009.
Put simply, the Industrial Production seems to have taken a big hit in July.
Impact on EUR/USD
A drop in the German Industrial Production will likely exacerbate recession fears, possibly triggering a sell-off in the common currency. The EUR/USD pair is already on the defensive, having created a Doji candle on Thursday.
The EUR may pick up a strong bid if the German data blow past expectations. The EUR/USD pair, however, needs to climb the Doji candle's high of 1.1085 to revive the bullish outlook put forward by a bullish candlestick pattern created earlier this week.
About German Industrial Production
The Industrial Production released by the Statistisches Bundesamt Deutschland measures outputs of the German factories and mines. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector. A high reading is seen as positive (or bullish) for the EUR, whereas a low reading is seen as negative (or bearish).
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.