When are the US durable goods orders and how could they affect EUR/USD?

US durable goods orders overview

Wednesday's US economic docket highlights the release of durable goods orders data for December. The US Census Bureau will publish the monthly report at 13:30 GMT. The headline orders are expected to rise by 0.9% during the reported month, slightly lower than the 1% increase recorded in the previous month. Core durable goods orders, which exclude transportation items and tend to have a broader impact than the volatile headline figures, are forecast to record a growth of 0.5% in December as against 0.4% previous.

According to Joseph Trevisani, Senior Analyst at FXStreet: “The relatively optimistic assessments for Durable Goods have low odds of being fulfilled. Individuals and families can logically opt to wait for a secure recovery before buying that new bicycle or boat. Business investment in the Nondefense category, may hold up as it is spending for execution in several months when a much better economic environment is anticipated.”

How could it affect EUR/USD?

Ahead of the key US macro data, a sharp fall in the global equity markets extended some support to the safe-haven US dollar. On the other hand, the shared currency was weighed down by the ECB Governing Council member, Klass Knot's comments on the euro strength. The combination of factors dragged the EUR/USD pair to the lower end of its weekly trading range, around the 1.2100 round-figure mark. Meanwhile, the market reaction to the data is more likely to remain limited as the focus remains on the latest FOMC monetary policy decision, due to be announced later during the US session.

FXStreet's own analyst, Yohay Elam offered a brief technical outlook and important levels to trade the major: “Euro/dollar has dropped below the 50 Simple Moving Average on the four-hour chart and momentum is to the downside. The pair also trades below the 100 and 200 SMAs. Critical support is at 1.21, the weekly low and also a psychologically significant level. The next levels to watch are 1.2050 and 1.2075, both stepping stones on the way up. Further below, 1.20 and 1.1960 are eyed. Resistance awaits at 1.2150, a separator of ranges last week, and then by the all-important 1.2190 cap – last week's peak and where the 200 SMA hits the price.”

Key Notes

  •   US Durable Goods Orders December Preview: Have job losses tipped over the consumer market?

  •   EUR/USD Forecast: ECB hits euro ahead of the Fed, bears eye break below 1.21

  •   EUR/USD struggles to extend Tuesday's bounce from 50-day SMA

About US durable goods orders

The Durable Goods Orders, released by the US Census Bureau, measures the cost of orders received by manufacturers for durable goods, which means goods planned to last for three years or more, such as motor vehicles and appliances. As those durable products often involve large investments they are sensitive to the US economic situation. The final figure shows the state of US production activity. Generally speaking, a high reading is bullish for the USD.