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 June. The US Census Bureau will publish the monthly report at 12:30 GMT and is expected to show that headline orders declined by 0.4% during the reported month as compared to the 0.8% rise in May. Orders excluding transportation items, which tend to have a broader impact, are anticipated to have increased by 0.2% in May, down from a 0.7% growth reported previously.

How could it affect EUR/USD?

Weaker-than-expected readings would further fuel concerns about an economic downturn and further cool expectations for more aggressive Fed rate hikes. This would be enough to exert some downward pressure on the US dollar and provide a goodish lift to the EUR/USD pair. Conversely, upbeat figures are more likely to be overshadowed by a goodish recovery in the global risk sentiment, which might continue undermining the safe-haven greenback. That said, any immediate market reaction is likely to be short-lived as the focus remains glued to the highly-anticipated FOMC policy decision, scheduled to be announced later during the US session.

Eren Sengezer, Editor at FXStreet, meanwhile, offered a brief technical outlook for the EUR/USD pair: “The Relative Strength Index (RSI) indicator on the four-hour chart dropped below 50, pointing to a bearish tilt in the short-term outlook. Additionally, EUR/USD now stays below the 100-period SMA on the same chart, confirming the view that buyers stay on the sidelines.”

Eren also outlined important technical levels to trade the EUR/USD pair: “On the downside, 1.0100 (psychological level) aligns as key support. In case this level fails on a hawkish Fed tone, additional losses toward 1.0000 and 0.9950 (July 14 low) could be witnessed.”

“Strong resistance seems to have formed at 1.0150, where the Fibonacci 23.6% retracement level of the latest downtrend and the 100-period SMA is located. If that level turns into support, buyers could target 1.0200 (psychological level, 50-period SMA) and 1.0230 (Fibonacci 38.2% retracement),” Eren added further.

Key Notes

 •  EUR/USD Forecast: Euro looks vulnerable ahead of Fed rate decision

 •  EUR/USD bounces off lows near 1.0100, FOMC in sight

 •  Daily technical and trading outlook – EUR/USD

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.