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US durable goods orders preview: What to expect of EUR/USD?

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 23, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Mumbai) - The EUR/USD dipped in Europe following a three-day winning streak. The pair trades around the hourly 200-DMA around 1.0921 levels ahead of the US durable goods orders and personal income and spending report.

    Focus on core PCE

    Durable goods orders in November are expected to have shrunk -0.7% following a 0.3% rise in the previous month. Non-Defense Capital Goods Orders excluding Aircrafts is believed to have dropped in November for the first time since August.

    The personal spending is seen rising 0.3% in November, while the growth in personal income is seen slowing to 0.2% compared to Oct’s 0.4%. Headline PCE for November could print at 0.4% YoY, while the Core reading is expected to print 1.3% YoY.

    The markets would be interested to see if the consumption - household spending (personal spending) and corporate spending (durable goods orders) – ticked higher in anticipation of a Fed rate hike in December. Meanwhile, the core PCE; the Fed’s preferred gauge of inflation; could trigger a fresh wave of buying in the USD if it prints higher than estimates.

    The personal spending and income report and the durable goods figure may not have much of an impact on the markets unless both/either of it prints significantly higher/lower than estimates.

    EUR/USD Technical Levels

    At 1.0923, the immediate support is seen at 1.0921 (hourly 200-MA), under which the pair could drop to 1.0890 (38.2% of 1.1495-1.0517+hourly 100-MA). A better-than-expected US data could trigger a break below 1.0890 and open doors for a drop to 1.0803 (Dec 17 low). On the other hand, a break above the immediate resistance at 1.0929 (hourly 50-MA) could open doors for 1.1006 (50% of 1.1495-1.0517). A horribly weak number, coupled with weakness in the US stocks could ensure a break above 1.1006 and a rise to 1.1040 (200-DMA)-1.1055 (100-DMA).
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