EURUSD Fundamental Analysis Ahead of German Factory Orders

The EURUSD pair was moving higher and increased 0.07% to 1.1084. Here is the EURUSD Fundamental Analysis of 05 December, 2019. 

05 December, 2019 | AtoZ Markets – German factory orders rose 0.3% month-on-month in October, after rising 1.3% the previous month, official data, expected at 07:00 GMT, should show. Factory orders were down 6.1% on an annualized basis, following a 5.4% drop in September.

EURUSD Fundamental Analysis – 05 December 2019

The IHS Markit Purchasing Managers’ Index (PMI) for the manufacturing rose to 42.1 in October from 41.7 in September. But it remained well below 50, marking the ninth consecutive monthly contraction.

More importantly, new orders fell for the 13th consecutive month, and factories lost jobs at the fastest pace in almost ten years. Overall, factory orders are unlikely to have grown in October.

EURUSD will likely face selling pressure if the data is below growth estimates of 0.3% month-on-month. Note that the pair already seems heavy, having created a candle with a long upper shadow on Wednesday.

However, if German data unexpectedly surpasses expectations, the single currency could find love. That said, an upside breakout would only be confirmed if the pair finds acceptance above the November 21st high at 1.1097.

Post-factory orders data, the pair will be at the mercy of wider market sentiment. Third-quarter eurozone GDP data expected at 10:00 GMT, and US factory orders expected at 15:00 GMT.

Factory orders published by the Deutsche Bundesbank are an indicator that includes deliveries, inventories, and new and unrealized orders. An increase in total factory orders may indicate an expansion of the German economy and could be an inflationary factor. The German factory hardly influences, positively or negatively, the total GDP of the euro area. A high value is positive (or bullish) for the euro, while a low value is negative.

Read More: 5 December Free GBP/USD, XAU/USD, ETH/USD and BTC/USD Trading Signals

US China Trade Agreement

On Wednesday, US President Donald Trump said the talks between China and the United States are going very well. Negotiators could also move closer to a tariff relief agreement. That could help avoid the next round of US tariffs on Chinese products due to come into effect on 15 December. Moreover, these tariff relief measures would be part of a phase one agreement.

Mr. Trump’s comments came just a day after he said that he did not have a deadline to reach an agreement. Also, he would not oppose what was expected after the November 2020 election.

The US dollar has lost ground. However, the US dollar futures contract, which tracks the greenback versus a basket of currencies, was down 0.09% at 97.56 at 21:00 PM ET (02:00 GMT).

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