German factory orders rose 0.3% month-on-month in October, having risen by 1.3% in the preceding month, the official data, due at 07:00 GMT, is expected to show.
Factory orders are seen falling 6.1% in annualised terms, having dropped 5.4% in September.
Lead indicators point to weakness
IHS Markit’s Purchasing Managers’ Index (PMI) for manufacturing ticked higher to 42.1 in October from September's reading of 41.7, but remained well below 50, signaling ninth straight monthly contraction.
More importantly, the new orders fell for the 13th consecutive month and factories shed jobs at the fastest pace in almost 10 years.
All in all, factory orders are unlikely to have registered a growth in October.
Impact on EUR/USD
EUR/USD will likely face selling pressure if the data prints below estimates of 0.3% month-on-month growth.
Note that the pair is already looking heavy, having created a candle with a long upper shadow on Wednesday.
However, if the German data unexpectedly blow past expectation, the single currency would find love. That said, a bullish breakout would be confirmed only if the pair finds acceptance above the Nov. 21 high of 1.1097.
Post-factory orders data, the pair will be at the mercy of the broader market sentiment, the Eurozone Q3 GDP data, due at 10:00 GMT and the US factory orders scheduled at 15:00 GMT.
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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