Overview of U.S. Durable Goods Orders

Wednesday’s U.S. economic agenda focuses on the release of July’s durable goods orders data. The U.S. Census Bureau will release its monthly report at 12:30 p.m. CST. The report is expected to report a 4.3% increase in overall orders for the month, compared to an upwardly revised 7.6% last month. Core durable goods orders, which exclude transportation items and tend to have a broader impact than the more volatile overall data, are expected to increase 2%, compared to 3.6% in the prior month. Orders for nondefense capital goods (excluding aircraft and parts) – considered a proxy for business investment – are expected to rise 1.9%, compared with a 3.4% increase in June.

How might this affect the EUR/USD?

Weak readings will further add to the growing market concern over the US economic recovery. This, in turn, could prompt some fresh selling around the dollar and assist the pair in gaining some positive traction. Conversely, market reaction to the surprisingly stronger-than-expected data is likely to be limited, as the focus remains on Fed Chairman Powell’s speech at the Jackson Hole Symposium on Thursday. Nonetheless, the data could still provide some momentum and assist traders in seizing some short-term opportunities.

Meanwhile, FXStreet’s own analyst Yohay Elam provided some of the main important technical levels for trading EUR/USD.” First support is at 1.18, followed by 1.1750, which was last week’s volatility low. The 1.17 round figure level remains an important cushion after holding EUR/USD several times in August.”

“Above 1.1850, the next level to watch is 1.1915, the peak in early August. After that is y 1.1965, the recent two-year high.” Yohay further added.”

Key notes

July Durable Goods Orders Preview. There’s some catching up to do

EUR/USD Forecast. Will slip amid stubborn resistance, fears of Fed failure fuel markets.

EUR/USD Price Analysis. Looks to range-move above 1.1750.

About U.S. Durable Goods Orders

Durable goods orders released by the U.S. Census Bureau measure the cost of orders received by manufacturers for durable goods, which are goods that are scheduled to last three or more years, such as automobiles and appliances. Because these durable goods often involve large investments, they are sensitive to U.S. economic conditions. The last number shows the status of U.S. production activity. In general, higher readings are bullish for the dollar.

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2020-08-26