German Factory Orders Plunge 5.4%, Weakening Euro: EUR/USD and EURO STOXX 50 Outlook

Market Overview

The Euro faced selling pressure after German Factory Orders plunged by 5.4%, far below the forecasted -0.3%. German Retail Sales also contracted by 0.6%, missing expectations of a 0.5% increase, reflecting economic challenges. EURO STOXX 50 remained under pressure as investors assessed these weak data points.

Looking ahead, key events include French Trade Balance data at 12:45 PM and Eurozone PPI figures at 3:00 PM, expected at 1.5%.

Additionally, the German 10-year bond auction results remain critical for gauging investor confidence. These events could shape the near-term direction for the Euro and regional equity markets.

EUR/USD Technical Analysis

EUR/USD is trading at $1.03459, up 0.06%, as the pair tests critical levels on the 4-hour chart. The pivot point at $1.03728 serves as a key marker for near-term direction. Immediate resistance is at $1.04590, with further upside capped at $1.05229. On the downside, immediate support rests at $1.03070, with deeper levels at $1.02219.

The 50 EMA at $1.03717 aligns with the pivot point, signaling a tight consolidation range. Meanwhile, the 200 EMA at $1.04760 underscores a bearish bias. A break below $1.03728 could trigger selling pressure, targeting support at $1.03070. Conversely, a break above $1.03728 may fuel bullish momentum, challenging resistance at $1.04590.

EURO STOXX 50 Fundamental Analysis

The EURO STOXX 50 index surged above 5,000, marking a three-week high, driven by energy sector gains (+0.8%). Investors analyzed inflation data, with German inflation surpassing expectations while French consumer prices rose less than anticipated.

Rate-sensitive sectors like real estate fell (-0.6%), while industrial goods climbed (+0.4%), supported by Kion Group’s 9.6% surge on AI partnerships.

As the European Central Bank’s January 30 policy meeting nears, inflation trends remain a focal point, shaping expectations for future rate decisions.

EURO STOXX 50 Technical Analysis

The EURO STOXX 50 is trading at 4997.5, down a modest 0.01%, as the market consolidates within a critical range. The pivot point at 4971 holds the key for near-term direction. A symmetrical triangle pattern suggests potential for a breakout, with immediate resistance at 5043 aligning with a triple-top formation, likely limiting further upside. On the downside, immediate support lies at 4917, with a deeper floor at 4858.

The 50 EMA at 4949 and 200 EMA at 4925 underscore near-term bullish momentum, but any break below 4971 could trigger sharper selling. Conversely, a sustained move above 4971 may pave the way toward testing 5043.