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

US durable goods orders overview

Thursday's US economic docket highlights the release of durable goods orders data for the month of June. The US Census Bureau is scheduled to release the monthly report at 12:30 GMT and consensus estimates point to a goodish rebound of 0.7% in the headlines figures as compared to the previous month's unexpected decline by 1.3%. 

Excluding transportation items - core durable goods orders, which tend to have a broader impact than the volatile headline figures, are also anticipated to record a modest growth of 0.2% during the reported month, down from 0.4% rise previous. Meanwhile, non-defence capital goods orders excluding aircraft and parts, a proxy for business investment are forecasted to have increased by 0.2% after May's strong rise of 0.5%.

Analysts at TD Securities provided their take on today's important release and write - “A welcome jump in the volatile nondefense aircraft segment (Boeing) and a rise in vehicle orders are likely to support headline growth. Although we pencil in a -0.2% m/m retreat in durable goods ex-transportation, we see scope for a small 0.2% gain in core capex orders.”

How could the data affect USD/JPY?

As Valeria Bednarik, FXStreet's own American Chief Analyst explains – “The USD/JPY pair continues hovering around the 50% retracement of its July’s decline, with sellers containing advances at around the next Fibonacci resistance, at 108.40. In the 4 hours chart, the 20 SMA has continued advancing, while the larger ones lack directional strength, all confined to a tight range around the current price, a sign of the absence of a clear trend.”

“Technical indicators in the same time-frame have turned south, the Momentum heading lower and the RSI modestly down, both around their midlines, further confirming the ongoing range than anticipating an upcoming directional move,” she added further.

Key Notes

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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.