When are the US Durable Goods Orders and how could they affect EUR/USD?

US Durable Goods Orders Overview

The US Census Bureau will publish the monthly Durable Goods Orders data for March later during the early North American session this Wednesday, at 12:30 GMT. The report is expected to show that headline orders rose by 0.8% during the reported month as compared to the 1% fall reported in February. Orders excluding transportation items, which tend to have a broader impact, are anticipated to register a modest 0.2% decline in March.

How could it affect EUR/USD?

Ahead of the key macro data, the emergence of fresh selling around the US Dollar (USD) lifts the EUR/USD pair back above the 1.1050 level, closer to a one-year high touched earlier this month. A weaker US Durable Goods Orders data will add to worries about a deeper economic downturn and reaffirm market expectations for an imminent interest rate cut by the Federal Reserve (Fed) later this year. This, in turn, could lead to a further decline in the US Treasury bond yields and weigh heavily on the buck, pacing the way for a further intraday appreciating move for the major.

In contrast, the market reaction to stronger US macro data is likely to be short-lived and do little to provide any respite to the USD bulls. Traders might prefer to wait on the sidelines ahead of the release of the Advance Q1 GDP report on Thursday and the US Core PCE Price Index - the Fed's preferred inflation gauge on Friday. This, in turn, suggests that the path of least resistance for the EUR/USD pair is to the downside and any intraday pullback might still be seen as a buying opportunity.

Eren Sengezer, Editor at FXStreet, offers a brief technical outlook for the EUR/USD pair and writes: “The 100-period Simple Moving Average on the four-hour chart at 1.0960 stays intact following Tuesday's pullback, highlighting buyers' willingness to continue to defend this level. The Fibonacci 23.6% retracement level of the latest uptrend is also located slightly below that level at 1.0950 to reinforce that support. Additionally, the Relative Strength Index (RSI) indicator recovered back above 50, confirming the bullish tilt in the short-term outlook.”

Eren also outlines important technical levels to trade the EUR/USD pair: “On the upside, 1.1050 (static level) could be seen as the next bullish target before 1.1075 (end-point of the latest uptrend) and 1.1100 (psychological level).”

“1.1000 (psychological level, static level) aligns as interim support before 1.0960/50. A four-hour close below the latter could cause technical sellers to come into play and drag the pair lower toward 1.0900,” Eren adds further.

Key Notes

 •  EUR/USD Forecast: Buyers manage to keep Euro above key support

 •  EUR/USD regains the smile and the 1.1000 barrier

 •  EUR/USD looks side-lined for the time being – UOB

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.