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  • EUR/USD posted marginal losses on Monday, ending a four-day winning streak.  
  • The 21-day moving average is the level to beat for the bulls.  
  • Lead indicators suggest Germany’s industrial production dropped in August.  

EUR/USD fell 0.06% on Monday, snapping the four-day winning run, which was the longest since June.

Notably, the currency pair faced rejection at the 21-day moving average for the third straight day on Monday. Hence, the average, currently located at 1.0992 is the level to beat for the bulls. A daily close above that level is needed to revive the corrective bounce from recent lows near 1.0880.

Focus on German data

The data scheduled for release at 06:00 GMT is expected to show the German Industrial Production fell 0.3% month-on-month in August, having dropped 0.6% in the preceding month. The annualized figure is forecasted to print at -2.7% versus -4.2% in July.

German Factory Orders fell 0.6% month-on-month in August – the second straight monthly decline – due to lower demand from domestic consumers, the official data showed on Monday.  

Also, the headline IHS Markit/BME Germany Manufacturing PMI for February – a single-figure snapshot of the performance of the manufacturing economy – had printed well below 50, signaling contraction.

Put simply,  the industrial production data is unlikely to surprise the market with a positive print.

That said, the German slowdown is generally accepted by now and price in. Hence, EUR/USD may remain resilient if the German Industrial Production drops as expected.  

A bigger-than-expected drop could invite stronger selling pressure, while a big beat on expectations  could help EUR/USD revisit the newfound 21-day MA resistance at 1.0992.

In the US session, the pair will likely take cues from the US Producer Price Index and comments by Federal Reserve’s President Powell.

As of writing, EUR/USD is trading largely unchanged on the day near 1.0975.  

Technical levels