Tuesday, October 6, 2015

German factory orders preview: What to expect in EUR/USD?

FXStreet (Mumbai) - The EUR/USD pair continues to trade around a flat line below the hourly 200-SMA at 1.1204, hovering close to the lower band of its recent consolidative range. The major failed to benefit from recent NFP-led steep losses in the greenback while Monday’s poor EU and the US services PMIs had little impact, as the prices remained pressured amid rising demand for higher yielding currencies.

German factory orders expected to rebound in August

Germany will report the state of its August factory orders ahead of European open, with markets expecting the factory data to pose a strong rebound to 0.5% in August on monthly basis. The country reported a 1.4% decline in orders in July.
While on annual basis, the factory orders are expected to show a sharp acceleration, posting a 5.6% growth, against a 0.6% decline seen in the same period last year.

EUR/USD: Key levels to watch

In the late Asian session, the EUR/USD pair trades around 1.1180, capped by the 1.12 barrier. On the upside, the major faces immediate resistance at 1.1204 (hourly 200-SMA) beyond which the confluence of 50-DMA and 20-DMA now located around 1.1226-1.1235 region, could act as a strong hurdle. A breach of the last could open doors for a retest of 1.1289 (previous highs) and from there to 1.1300 (round number). Should the data surprise on the downside, we could see the pair drop to the immediate support located at 1.1150 region (Oct 2 Low), below which 1.1100 levels (psychological levels and Sept 23 Low) could be tested.
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