German Factory Orders overview
German factory orders are seen falling by 1.9% month-on-month in February, having bounced by 5.5% in January. On an annualized basis, the industrial orders fell by 1.4% in January. The data will be released at 06:00 GMT.
Bearish lead indicator
IHS Markit’s German Purchasing Managers’ Index (PMI) for Manufacturing, which accounts for about a fifth of the economy, was revised downwards to 45.4 in March from the preliminary reading of 45.7, signalling a deeper contraction.
Germany’s export-dependent manufacturing sector saw the steepest decrease in output in almost 11 years in March, in the face of the coronavirus-led plan closures in Europe’s most powerful economy.
However, the same may not be reflected in the February numbers.
Impact on the EUR
EUR/USD manages to hold the 1.08 handle so far this Monday, having dipped briefly to 1.0773 last Friday amid broad-based US dollar strength, as the virus fears stoked the safe-haven demand for the buck.
The pair, therefore, is on the defensive and could suffer a drop to 1.0773 (Friday’s low) on weaker-than-expected German data. Should the greenback catch fresh bids on a turnaround in the risk sentiment, the main currency pair could accelerate declines towards 1.0700.
A big beat on expectations could offer fresh legs to the bounce in the single currency, driving the pair to Friday’s high of 1.0865 above which the 1.0900 level could be test.
At press time, EUR/USD is trading at 1.0820, up 0.11% on a daily basis.
EUR/USD technical levels