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 October. The US Census Bureau will publish the monthly report at 13:30 GMT and is expected to show that headline orders rose by 0.4% for the second straight month. Orders excluding transportation items, which tend to have a broader impact, are anticipated to remain flat in October as compared to the 0.5% fall recorded in the previous month.

How could it affect EUR/USD?

Ahead of the data, the US Dollar remains on the defensive near the weekly low amid rising bets for a less aggressive policy tightening by the Fed. Any disappointment from the US macro data will be enough to prompt fresh selling around the buck and assist the EUR/USD pair to capitalize on the previous day's bounce from over a one-week low. Conversely, a stronger report could force traders to lighten their USD bearish bets heading into the FOMC meeting minutes, due for release later during the US session. The immediate market reaction, however, is likely to remain limited as traders keenly await clues about the Fed's future rate-hike path.

Eren Sengezer, Editor at FXStreet outlines important technical levels for the EUR/USD pair: “Previous nine four-hour candles for EUR/USD closed higher but the pair lost its bullish momentum near the 50-period Simple Moving Average (SMA), currently located at 1.0350. Just slightly above that SMA, 1.0360 aligns as a static level, forming a resistance area in 1.0350/60. In case the pair rises above that hurdle and starts using it as support, it could target 1.0420 (end-point of the latest uptrend) and 1.0480 (November 15 high).”

“On the downside, first support is located at 1.0300 (20-period SMA, psychological level) before 1.0250 (Fibonacci 23.6% retracement) and 1.0200 (psychological level, static level),” Eren adds further.

Key Notes

 •  EUR/USD Forecast: Technicals struggle to turn bullish ahead of key data releases

 •  EUR/USD to extend its rally to 1.0400/1.0450 in the coming days – ING

 •  EUR/USD: No reason as yet to shift end-2022 target at 1.0350 – Credit Suisse

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.