When is the German Industrial Production and how could it affect EUR/USD?
|Overview
Eurozone's manufacturing powerhouse Germany is set to publish Industrial Production figures for October at 07:00 GMT.
The data is expected to show the factory activity expanded at a seasonally adjusted rate of 0.1% month-on-month in October, having dropped by 0.6% in the preceding month.
Meanwhile, the annualized number is forecasted to print at -2.8% compared to September's -4.3%.
Weak data likely
Industrial Production is unlikely to have registered growth in October, according to lead indicators.
Factory Orders dropped 0.4% month-on-month in October compared to a revised 1.5% increase in September and missing expectations for a 0.3% rise.
Further, IHS Markit’s Purchasing Managers’ Index (PMI) for manufacturing had remained well below 50 in October, signaling contraction for the ninth straight month.
Impact on EUR/USD
EUR/USD closed above the Nov. 21 high of 1.1097 on Thursday, invalidating the bearish lower highs setup. Put simply, the path of least resistance is to the higher side.
The 14-day relative strength index is also reporting bullish conditions with an above-50 print.
More importantly, the pair managed to print a bullish close on Thursday despite the dismal German Factory Orders data. Put simply, markets seem to have done pricing in the German slowdown.
The pair, therefore, may not see big losses even if the Industrial Production prints below estimates. On the flip side, upbeat data could end up bolstering the bullish technical setup.
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.