According to today's data, orders for industrial goods in Germany unexpectedly fell, undermining optimism that the sector could soon emerge from a three-year recession. This worrying signal raises doubts about the resilience of the economic recovery, which is already facing serious challenges amid global uncertainty and the energy crisis.

The decline in orders, particularly from abroad, indicates weakening demand for German products, which may increase pressure on export-oriented industries. This, in turn, could lead to reduced investment, lower employment, and slower overall economic growth.

Despite government efforts to support industry, structural problems linked to tariffs, high energy costs, and a shortage of skilled labor continue to hold back the sector's development. Exiting the recession will require comprehensive measures aimed at fostering innovation, boosting competitiveness, and reducing dependence on external factors.

The report said demand in July fell by 2.9% compared to the previous month. Economists had forecast a 0.5% increase. Without large-scale orders, growth would have been 0.7%.

"Volatility in order development is still driven by high trade and geopolitical uncertainty," the Ministry of Economy said in a statement. "Demand remains low even after adjusting for fluctuations. However, there are signs that industrial demand has reached its bottom."

The report highlights the difficulties Europe's largest economy faces in trying to overcome a prolonged downturn while simultaneously dealing with high U.S. tariffs. Although companies are increasingly hopeful of a rebound supported by higher government spending, they continue to assess their current situation as difficult.

It should be recalled that the European Union's agreement with the United States sets 15% tariffs on most goods exported to that country, and authorities are seeking to extend this rate to cars, which are currently subject to higher tariffs. This would be a relief for the sector, which recently received a rare boost from rising demand for electric vehicles.

As for other industries, many companies are also facing significant challenges. Chemical plants operated at only 72% of capacity in the second quarter — the lowest level in more than 30 years. According to research institutes, a recovery of the German economy still looks unlikely. All of them expect growth next year, supported by government spending and rate cuts from the European Central Bank.

Market reaction in the currency space to this news was fairly muted.

Current technical picture for EUR/USD: Buyers now need to break through 1.1680. Only this will allow a move toward testing 1.1715. From there, the pair could climb to 1.1740, though doing so without support from major players will be difficult. The most distant target is the 1.1790 high. If the instrument declines, I expect significant buyer activity only near 1.1645. If there is no support there, it would be better to wait for a retest of the 1.1610 low or open long positions from 1.1575.

Current technical picture for GBP/USD: Pound buyers need to break the nearest resistance at 1.3445. Only this will allow a move toward 1.3485, above which breaking through will be difficult. The most distant target is the 1.3515 level. If the pair falls, the bears will try to regain control at 1.3415. If they succeed, a breakout of the range will deliver a serious blow to the bulls and push GBP/USD