When is the US Durable Goods Orders data and how it could affect EUR/USD?

US Durable Goods Orders data Overview

The United States (US) Durable Goods Orders data for August is due for release today at 12:30 GMT. The Census Bureau is expected to show that fresh orders for durable goods have declined for the third time in a row. However, the pace of decline is expected to be moderate at 0.5%, compared to a 2.8% contraction seen in July. The Durable Goods Orders data measures the cost of orders received by manufacturers for durable goods.

Costs for durable goods are influenced by the change in labour or raw material costs, or both. Theoretically, an increase in the cost of discretionary goods prompts inflation and forces the Federal Reserve (Fed) to turn hawkish on the interest rate outlook. Alternatively, declining durable goods’ cost reflects cooling price pressures, which allow the Fed to turn dovish on policy rates.

How could the US Durable Goods Orders data affect EUR/USD?

EUR/USD trades with caution near 1.1750 during the European trading session. The major currency pair resumes its downside journey on Wednesday after a two-day recovery move to near 1.1820. The pair has been under pressure as the US Dollar (USD) trades firmly, following the monetary policy announcement by the Fed last week.

The major currency pair trades close to the 20-day Exponential Moving Average (EMA), which is around 1.1744, suggesting that the near-term outlook is uncertain.

The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, indicating a sideways trend.

Looking up, the EUR/USD pair could rise towards the psychological level of 1.2000 if it breaks above the four-year high around 1.1920. On the downside, the September low around 1.1600 will be a key support zone for the pair in case the pair extends its downside below the September 12 low of 1.1700.