When are the US macro releases and how could they affect EUR/USD?

The US Economic Data Overview

Wednesday's US economic docket highlights the releases of the preliminary (second estimate) of Q4 GDP print, Durable Goods Orders and Initial Weekly Jobless Claims, scheduled at 13:30 GMT. The US economy is anticipated to have recorded a growth of 4.1% during the October-December period, slightly higher than the advance estimates of 4.0%.

Separately, the US Durable Goods Orders are expected to have increased by 1.1% in January as compared to a 0.5% rise recorded in the previous month. Conversely, orders ex-transportation are forecast to increase by 0.7% and Nondefense Capital Goods Orders ex-aircraft are projected to rise by 0.6% during the reported monthly.

Meanwhile, Initial Jobless Claims are forecast to drop to 838,000 during the week ended February 19, down from the previous week's reading of 861,000. Continuing Claims are expected to fall to 4.467 million from 4.494 million previously.

How Could the Data Affect EUR/USD?

Ahead of the key releases, the US dollar witnessed some heavy selling pressure and so far, has failed to benefit from a fresh leg up in the US Treasury bond yields. Given the Fed Chair Jerome Powell's dovish assessment of the US economy, softer-than-expected data could aggravate the USD bearish pressure. Conversely, the market reaction to surprisingly stronger readings might turn out to be temporary and do little to provide any meaningful boost to the greenback. This, in turn, suggests that the path of least resistance for the EUR/USD pair remains on the upside.

Meanwhile, Yohay Elam, Analyst at FXStreet offered a brief technical outlook for the major and writes: “Euro/dollar has broken above the mid-January high of 1.2250 and also continues benefiting from upside momentum on the four-hour chart. Moreover, it is trading well above the 50, 100 and 200 Simple Moving Averages, while the Relative Strength Index is below 70 – outside overbought conditions.”

Yohay further provided important technical levels to trade the pair: “Resistance awaits at 1.225, which was a peak in mid-January. It is followed by 1.2280, a swing high early in the year, ahead of 1.2310 and 1.2350. Support awaits at the 1.2190 level mentioned earlier, followed by 1.2170 and 1.2130.”

Key Notes:

   •  US January Durable Goods and Q4 GDP Preview: Consumers worry but they spend

   •  US Initial Jobless Claims Preview: Exceptional layoffs become mundane

   •  EUR/USD Forecast: Next stop 1.2280? Weak US data may serve as the next bullish trigger

About the US GDP Report

The Gross Domestic Product Annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. GDP Annualized is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for the USD, while a low reading is negative.

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.

About US Initial Jobless Claims

The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market which influences the strength and direction of the US economy. Generally speaking, a decreasing number should be taken as positive or bullish for the USD.