US durable goods orders overview
Wednesday's US economic docket highlights the release of durable goods orders data for the month of May. The US Census Bureau is scheduled to release the monthly report at 12:30 GMT and consensus estimates point to a modest rebound of 0.2% in the headlines figures as compared to the previous month's sharp decline of 2.1%.
Excluding transportation items - core durable goods orders, which tend to have a broader impact than the volatile headline figures are also anticipated to post a modest rise of 0.1% during the reported month. Meanwhile, non-defense capital goods orders excluding aircraft and parts, a proxy for business investment are forecast to rise by 0.1% after April’s 1.0% drop.
However, analysts at TD Securities are expecting the US durable goods orders to dip -1.0% m/m in May and commented “Another notable decline in the highly volatile nondefense aircraft segment (driven by ongoing Boeing woes) should continue to drag the headline measure lower despite an expected improvement in auto sales at 2% m/m. We have a mixed view on the core measures: we pencil in a 0.1% m/m retreat in the durable goods ex-transportation segment, while expecting a 0.2% bounce in core capex orders following its 1.0% drop in April.”
Deviation impact on EUR/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed, the reaction is likely to be in the range of 20-25 pips during the first 15-minutes in case of a deviation from +0.36 to -0.51 and could extend up to 51-55 pips in the following 4-hours.
EUR/USD important levels to watch
Yohay Elam, FXStreet's own Analyst offers some important technical levels ahead of the important release – “Resistance awaits at 1.1375 which was the daily high. It is followed by 1.1415 that capped the currency pair's rise on Wednesday and is the highest level in three months. Further up, 1.1445 was a peak back in March, and the next hurdle is only at 1.1520.”
“Looking down, support awaits at 1.1350 which capped the pair in early June. It is followed by 1.1320 that was a stepping stone on the way up last week, and then 1.1270that provided support in mid-June,” he added further.
Key Notes
• US Durable Goods Orders Preview: Recovery but where is the trend?
• EUR/USD Forecast: Fed fears fade and the rally may resume
• EUR/USD struggles for direction in the 1.1350/60 band
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.
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