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 March. The US Census Bureau will publish the monthly report at 12:30 GMT. Following an unexpected decline in February, the headline orders are expected to rise 2.5% during the reported month. Core durable goods orders, which exclude transportation items and tend to have a broader impact than the volatile headline figures, are anticipated to have increased by 1.6% in March.

How could it affect EUR/USD?

Ahead of the key release, sustained US dollar selling pushed the EUR/USD pair to two-month tops, though bulls struggled to find acceptance above the 1.2100 round-figure mark. A goodish pickup in the US Treasury bond yields allowed the USD to rebound from multi-week lows and kept a lid on any further gains for the major. A stronger report will add to the narrative for a relatively faster US economic recovery from the pandemic. That said, firming expectations that the Fed will keep interest rates lower for a longer period might continue to act as a headwind for the greenback. This, in turn, suggests that the path of least resistance for the major remains to the upside.

FXStreet's own analyst, Yohay Elam provided a brief technical outlook: “Euro/dollar is trending higher since late March, as the four-hour chart shows. On its way up, the currency pair topped the early-March peak of 1.2110 and hit a new high of 1.2116 – a level last seen in late February. Momentum is to the upside and the Relative Strength Index (RSI) is just under 70. If this indicator tops that level, it would enter overbought conditions and signal a correction. However, bulls currently remain in control.”

Yohay also offered important technical levels to trade the major: “Above 1.2116, the next levels to watch are 1.2170 and 1.2250. Support awaits at the previous April peak of 1.2180, followed by the battle line of 1.2050 and then by the psychological barrier of 1.20.”

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.