Germany reported very disappointing factory orders numbers: these fell by 1.8% in August instead of rising 0.5% as economists had predicted. And, this came on top of a downwards revision for July: a fall of 2.2% after -1.4% was initially reported.
EUR/USD drifts lower within a narrowing range, confined in the triangle.
While factory orders are volatile, the back to back drops in the summer are already more meaningful. The most recent fall goes hand in hand with the crash in Chinese stocks and the falling demand from the world’s second largest economy.
However, in September the German economy received more negative news: the emissions cheating scandal at Volkswagen that is set to hit the German economy for quite a few months to come.
We mentioned this wedge several time. It was formed in August and September and tested twice in October. The recent attempts to break higher were to the upside, which is a steeper downtrend. Today is stands at 1.13. However, the pair is moving lower, trading at 1.1180 and support is awaiting at 1.1120.
More: Why USD will beat EUR and JPY despite the NFP – Goldman Sachs
Will we see it break out of range today? Here is the chart:
In our latest podcast we discuss the Nightmare NFP, Judge Japan and Natural Gas:
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