When are the US durable goods orders and how could they affect EUR/USD?

US durable goods orders overview

Friday's US economic docket highlights the release of durable goods orders data for August. The US Census Bureau will publish the monthly report at 12:30 GMT. The headline orders are expected to rise 1.5% during the reported month, marking a sharp deceleration from the previous month's 11.4%. Core durable goods orders, which exclude transportation items and tend to have a broader impact than the volatile headline figures, are forecast to increase 1.2% as against 2.6% previous. Non-defence capital goods orders (excluding aircraft and parts) - seen as a proxy for business investment - are anticipated to grow 0.1% versus July's 10.1% gain.

How could it affect EUR/USD?

A disappointing reading will add to market concerns that the second wave of coronavirus infection could derail the economic recovery. This, in turn, should continue to drive some haven flows towards the US dollar. Conversely, stronger-than-expected figures will be enough to provide an additional boost to the already stronger greenback. Nevertheless, the EUR/USD pair seems all set to prolong its recent bearish trajectory.

Meanwhile, Pablo Piovano, FXStreet's own Analyst provided a brief technical outlook to trade the major: “EUR/USD managed to gather some composure in the area of multi-week lows near 1.1630 on Thursday. The recently broken key contention area in the 1.1700 neighbourhood has now become the next target of significance if buyers regain the upper hand and push for a more serious bullish attempt. On the downside, and in the event of the resumption of the selling bias, recent lows near 1.1630 emerges as the initial, albeit interim, support zone. A deeper retracement to the relevant contention region around 1.15 (March tops) is still unfavoured.”

Key Notes

  •   US Durable Goods Orders August Preview: Duplicating the retail sales slowdown

  •   EUR/USD Price Forecast: Next upside target emerges at 1.1700

  •   EUR/USD recedes to daily lows in the 1.1640 area

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.