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

US durable goods orders overview

Monday's US economic docket highlights the release of durable goods orders data for June. The US Census Bureau is scheduled to release the monthly report at 12:30 GMT. The headline orders are expected to have increased by 7.2% during the reported month as compared to the previous month's robust growth of 15.7%. Core durable goods orders, which exclude transportation items and tend to have a broader impact than the volatile headline figures, are seen rising by 3.5% as against 3.7% previous. Non-defence capital goods orders (excluding aircraft and parts) - seen as a proxy for business investment - are forecasted to climb 2.3% versing May's 1.6% gain.

How could it affect EUR/USD?

Ahead of the key release, the EUR/USD pair was seen hovering near its highest level since September 2018 – comfortably above the 1.1700 mark. Even a slight disappointment will be enough to further dent the already weaker sentiment around the US dollar and provide an additional boost to the major. Conversely, a stronger reading might fail to provide any respite to the USD bulls or interrupt the pair's well-established near-term bullish trend.

As Joseph Trevisani, Senior Analyst at FXStreet explains: "For markets and the dollar durable goods will likely provide little new information. Even if considerably better than the forecast it will only confirm the retail figures.  If it is unexpectedly worse then the recent dollar selling will look prescient."

Meanwhile, Pablo Piovano FXStreet's own Analyst offered a brief technical outlook and provided some important technical levels to trade the major: EUR/USD is navigating well into the overbought territory, as per the daily RSI, hinting at the idea that a corrective downside could well be in the offing.

That said, interim support emerges at the previous June’s peak at 1.1495 seconded by the Fibo level (of the 2017-2018) rally near 1.1450. The latter is also reinforced by June’s top at 1.1422. Back to the upside, which is the favoured short-term scenario, a move further north of so far tops around 1.1730 should pave the way for a visit to September 2018 top at 1.1815 ahead of 1.1852 (June’s 2018 high), he added further.

Key Notes

   •  US Durable Goods Orders June Preview: Consumers may spend but what about business?

   •  EUR/USD Forecast: Next relevant target emerges at 1.1815

   •  EUR/USD breaks above 1.17 to target September 2018 high at 1.1833 – Commerzbank

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.