Dismal Durable Goods Report to Prop Up EUR/USD Ahead of Yellen Speech

U.S. Durable Goods Orders to Contract.6.0% in July.

Non-Defense Capital Goods Orders ex. Aircrafts to Increase 0.4%.

See How Shifts in EUR/USD Retail Positioning are Impacting Trend- Click Here to Learn More About Sentiment.

Trading a News: U.S. Durable Goods Orders

US Durable Goods Orders

A 6.0% decrease in orders for U.S. Durable Goods competence column adult EUR/USD going into a finish of a month as it dampens a opinion for enlargement and inflation.

Why Is This Event Important:

Another collection of churned information prints competence moderate a interest of a greenback as it encourages a Federal Open Market Committee (FOMC) to lift a stream process into 2018.

Even yet ‘the Committee expects to start implementing a change piece normalization module comparatively soon, Chair Janet Yellen competence strike a some-more discreet tinge during a Kansas City Fed Economic Symposium in Jackson Hole, Wyoming as many officials ‘saw some odds that acceleration competence sojourn subsequent 2 percent for longer than they now expected, and several indicated that a risks to a acceleration opinion could be slanted to a downside.’ In turn, Chair Yellen and Co. competence plan a some-more shoal trail for a Fed Funds rate during a subsequent rate preference on Sep 20, with a U.S. dollar during risk of confronting additional headwinds over a residue of a year generally as a opinion for mercantile process stays dark with high uncertainty.

Impact that the U.S. Durable Goods Orders report has had on EUR/USD during a last release

June 2017 U.S. Durable Goods Orders

EUR/USD 5-Minute Chart

EUR/USD Chart

Demand for U.S. Durable Goods surged 6.5% in Jun to symbol a incomparable allege given 2014, while Non-Defense Capital Goods Orders incompatible Aircrafts, a substitute for business investment, fell 0.1% during a same duration amid forecasts for a 0.3% rise. The churned developments entrance out of a U.S. economy competence inspire a Federal Open Market Committee (FOMC) to keep a stream process via a residue of a year as acceleration continues to run subsequent a 2% target. EUR/USD showed a singular greeting to a array of churned information prints, though a span tracked reduce via a North American trade to finish a day during 1.1675.

How To Trade This Event Risk(Video)

Bearish USD Trade: U.S. Durable Goods Orders Contract 6.0% or Greater

  • Need a green, five-minute candle following a news to cruise a prolonged EUR/USD trade.
  • If a marketplace greeting favors a bearish dollar position, buy EUR/USD with dual apart lots.
  • Set stop during a near-by pitch low/reasonable stretch from entry; demeanour for during slightest 1:1 risk-to-reward.
  • Move stop to breakeven on remaining position once initial aim is met, set reasonable limit.

Bullish USD Trade: Demand for Large-Ticket Items Beat Market Expectations

  • Need a red, five-minute EUR/USD candle to cruise a prolonged dollar trade.
  • Implement a same proceed as a bearish dollar position, only in reverse.

Potential Price Targets For The Release

EUR/USD Daily Chart

EUR/USD Daily Chart

Check out a EUR/USD quarterly projections in a FREE DailyFX Trading Forecasts

  • Broader opinion for EUR/USD stays constructive as both cost and a Relative Strength Index (RSI) safety a ceiling trends carried over from late-2016, with a subsequent topside jump entrance in around 1.1960 (38.2% retracement).
  • However, a miss of movement to fill-in a opening from January-2015 (1.2000 down to 1.1955) raises a risk for a incomparable improvement generally as a bull-flag arrangement fails to vessel out; competence see EUR/USD continue to face range-bound conditions as a 1.1670 (50% retracement) segment continues to offer support.
  • Interim Resistance: 1.1960 (38.2% retracement) to 1.2042 (July 2012-low)
  • Interim Support: 1.1390 (61.8% retracement) to 1.1400 (61.8% expansion)

EUR/USD Retail Sentiment

EUR/USD Sentiment

Retail merchant information shows 28.1% of traders are net-long EUR/USD with a ratio of traders brief to prolonged during 2.56 to 1. In fact, traders have remained net-short given April 18 when EUR/USD traded nearby 1.07646; cost has changed 9.7% aloft given then. The series of traders net-long is 8.1% reduce than yesterday and 22.6% reduce from final week, while a series of traders net-short is 4.8% aloft than yesterday and 20.4% aloft from final week.

— Written by David Song, Currency Analyst

To hit David, e-mail dsong@dailyfx.com. Follow me on Twitter during @DavidJSong.

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