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

US durable goods orders overview

Tuesday's US economic docket highlights the release of Durable Goods Orders data for the month of June. The US Census Bureau will publish the monthly report at 12:30 GMT. The headline orders are expected to rise 2.1% during the reported month, down from the 2.3% growth recorded in May. Orders excluding transportation items, which tend to have a broader impact, are anticipated to have increased by 0.8% in June as against the 0.3% rise in the previous month.

How could it affect EUR/USD?

Ahead of the key release, the risk-off impulse in the markets drove some haven flows towards the US dollar and exerted some pressure on the EUR/USD pair. A stronger report might provide an additional boost to the greenback and drag the pair back closer to the three-and-half-month lows touched last week.

Conversely, a softer reading will further fuel worries that the fast-spreading Delta variant of the coronavirus could derail the global economic recovery. This, in turn, should act as a tailwind for the safe-haven USD, suggesting that the path of least resistance for the major remains to the downside.

That said, any knee-jerk market reaction is more likely to be short-lived and reversed quickly as investors might refrain from placing aggressive bets ahead of the FOMC policy decision on Wednesday. Nevertheless, the data might still provide some meaningful impetus to the pair and allow traders to grab some short-term opportunities.

Meanwhile, Yohay Elam, FXStreet's own analyst, provided a brief technical outlook: “Euro/dollar has slipped below the 50 Simple Moving Average on the four-hour chart after failing to recapture the 100 SMA. Moreover, momentum has turned back to the downside after several sessions on the upside. Bears are looking stronger.”

Yohay also offered important technical levels to trade the major: “Support awaits at the July low of 1.1750, followed by 1.1717 and 1.17, levels last seen early in the year. Resistance is at 1.1812, the daily high, followed by1.1830, 1.1850 and 1.1880, which all capped recovery attempts.”

Key Notes

  •   Durable Goods Orders Preview: Why expectations could be too high, data useful for trading GDP

  •   EUR/USD Forecast: Covid, US data and Fed tensions are set to keep bears in control

  •   EUR/USD Price Analysis: Further downside likely below 1.1830

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.