The German Industrial Production indicator measures change in production in the important manufacturing, utilities and mining sectors. A reading which is higher than the market forecast is bullish for the euro.
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Tuesday at 11:00 GMT.
Indicator Background
The German Industrial Production gives analysts a snapshot of economic conditions in important industrial sectors in the German economy. As the indicator is quite volatile, traders should keep in mind that the market forecasts are often not accurate.
After an increase in December, the indicator disappointed last month, contracting by 0.6%. For February, the markets are predicting another contraction of 0.1%. Will the indicator surprise the markets and climb into positive territory this month?
Sentiments and levels
All market eyes are on the debt negotiations between the troika and the Greek government, as the latter must make a major bond payment next month. Other European countries, notably Portugal, are also in deep trouble, and this will weigh on the euro. So, the overall sentiment has turned from neutral to bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.3212, 1.3145, 1.3060, 1.30, 1.2945, 1.2873, and 1.2760.
5 Scenarios
- Within expectations: -0.3% to 0.5%: In such a case, the Euro is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.6% to 1.0%: An unexpected higher reading can send EUR/USD well above one resistance line.
- Well above expectations: Above 1.0%: The chances of such a scenario are very low. A second resistance line might be broken on such an outcome.
- Below expectations: -0.8% to -0.4%: A weak reading could result in the pair dropping below one support level.
- Well below expectations: Below -0.8%: A serious drop in the indicator could well push EUR/USD downwards, and two or more support levels could be broken.
For more on the Euro, see the EUR/USD.