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 February. The US Census Bureau will publish the monthly report at 12:30 GMT. Following a 3.4% jump in January, the headline orders are expected to rise by a modest 0.8% during the reported 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 0.6% in February as against 1.3% previous.

According to Joseph Trevisani, Senior Analyst at FXStreet: “Purchases of long-duration consumer goods are expected to remain positive in February, enabled by the improving labor market, despite the plunge in Retail Sales after the expiration of December stimulus payments.”

How could it affect EUR/USD?

Ahead of the key US macro data, sustained US dollar buying dragged the EUR/USD pair to the 1.1800 neighbourhood, or fresh four-month lows, though upbeat Eurozone PMIs helped limit further losses. A strong reading will add to the narrative of a strong US economic recovery and provide an additional boost to the greenback. Conversely, the market reaction to slightly disappointing reading is likely to be limited amid the optimistic US economic outlook. Apart from this, concerns about the third wave of COVID-19 infections and pandemic-related lockdowns in Europe could cap gains for the shared currency. This, in turn, suggests that the path of least resistance for the major remains to the downside.

FXStreet's own analyst, Yohay Elam offered a brief technical outlook and important levels to trade the major: “Euro/dollar has dropped below the previous 2021 trough of 1.1836, hitting a low of 1.1812 before bouncing. With momentum remaining to the downside on the four-hour chart and the Relative Strength Index holding above 30, bears remain in control. Immediate support awaits at 1.1812, followed by 1.1750 and 1.1690 last seen in November. Resistance is at 1.1875, a cushion from recent days, followed by 1.1910 and 1.1950.”

Key Notes

  •   US Durable Goods February Preview: Consumption to reflect labor market recovery

  •   EUR/USD Forecast: Euro loses support on multiple storms, data bounce serves new sell opportunity

  •   EUR/USD tumbles to 2021 lows near 1.1810

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.