EUR/USD remains under pressure as concerns over France’s fiscal position weigh on the euro, while Germany’s factory orders fell 10.6% month over month in August. The data, released on Tuesday, October 6, significantly missed economists’ forecast of a 1.0% decline and followed a revised 2.5% increase in July.
On a yearly basis, German factory orders rose 2.7%, but growth slowed sharply from the previous revised 14.0%. The weaker-than-expected figures point to losing momentum in Germany’s industrial sector, adding to concerns about the eurozone’s economic outlook. However, the August factory-orders data is an additional bearish factor rather than the primary driver of the euro’s weakness on October 6.
The euro was already under significant pressure amid concerns over France’s fiscal position and rising government bond-market risks. EUR/USD briefly fell to around $1.1161 before recovering above 1.12, keeping the pair close to a 17-month low. Investors are closely watching the yield spread between French and German government bonds as they assess the risk of prolonged fiscal and political uncertainty in France.
Together, France’s fiscal concerns and weaker German economic data create a bearish backdrop for EUR/USD, although deeply oversold technical conditions could leave the pair vulnerable to a short-term corrective rebound.
Technical Analysis
EUR/USD remains firmly bearish on the daily chart, with the pair trading around 1.1207 and continuing to form lower highs and lower lows. The price has also broken below the 1.13245 support-turned-resistance area, reinforcing the current downside structure.
Momentum indicators confirm the bearish bias. The RSI (14) has fallen to around 17.90, placing the pair deep in oversold territory. Meanwhile, the MACD remains below the zero line, with bearish momentum still dominant. Although these signals suggest sellers remain in control, the deeply oversold RSI also increases the risk of a short-term corrective rebound.
On the downside, 1.11305 is the key support to watch. A decisive daily break below this level could signal further downside and extend the current bearish move. On the upside, 1.13245 is the first major resistance. A recovery above this level could ease immediate selling pressure, with 1.14998 and 1.16128 becoming the next resistance areas.
For traders, the key scenario is therefore simple: as long as EUR/USD remains below 1.13245, the technical bias stays bearish. A break below 1.11305 would strengthen the downside scenario, while a sustained move back above 1.13245 would provide the first meaningful sign of a recovery.
