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US Industrial Production preview: What to expect in EUR/USD?

FXStreet (Mumbai) - The EUR/USD pair is now largely unchanged on the week around 1.1350 levels as the USD demand kicked-in ahead of the weekend. The focus now shifts to the US industrial production and Michigan confidence number in the US.

US industrial production to contract again

The actual figure for September is expected to come-in at -0.3%, compared to the 0.4% drop seen last month.The final PMI indices released earlier this month had shown contraction in the activity, with a drop in the new order inflow. Even the regional manufacturing indices also shown contraction with a sharp drop in the new order inflow.

Consequently, a contraction in the industrial production may not be a surprise for the markets, so long as the number is above the previous month’s figure of -0.4%. Meanwhile, the University of Michigan confidence index could trigger a reaction in the markets in case the figure beats/misses forecast by a big margin.

EUR/USD Technical Levels

At 1.1350, the spot is trading below its weekly 50-MA at 1.1353. A break above 1.14 handle ahead of the weekend would require a surprisingly weak US industrial production and consumer sentiment figure. In such a case, the pair could see a weekly close above 1.14. On the other side, the pair could drop below 1.1311 (trend line support) in case the industrial production turns positive. A weekly close below 1.1311 would open doors for a sell-off to 50-DMA at 1.1244 levels.

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