TheNews

Trading the News: U.S. Durable Goods Orders

A 3.0% contraction in orders for U.S. Durable Goods may hamper the near-term advance in the greenback and spur a rebound in EUR/USD should the data print undermine Fed expectations for a ‘consumer-led’ recovery in 2016.

What’s Expected:



Why Is This Event Important:

A slowdown in private-sector consumption, one of the leading drivers of growth and inflation, may push the Federal Open Market Committee (FOMC) to further delay the normalization cycle as the weakening outlook for the global economy derails hopes for a stronger recovery.

How To Trade This Event Risk
Bearish USD Trade: Demand for Large-Ticket Items Decline 3.0% or Greater

• Need to see green, five-minute candle following the release to consider a long trade on EURUSD.
• If market reaction favors a bearish dollar trade, buy EURUSD with two separate position.
• Set stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward.
• Move stop to entry on remaining position once initial target is hit; set reasonable limit.

Bullish USD Trade: U.S. Durable Goods Orders Exceed Market Forecast

• Need red, five-minute candle to favor a short EURUSD trade.
• Implement same setup as the bearish dollar trade, just in the opposite direction.

Potential Price Targets For The Release
EURUSD Daily

• EUR/USD may have marked a failed run at the 2016 high (1.1375) as the Relative Strength Index (RSI) fails to retain the bullish formation carried over from the previous month, but the pair may continue to consolidate with the broad range from 2015 as market participants continue to mull the timing of the next Fed rate-hike.
• Interim Resistance: 1.1510 (50% retracement) to 1.1520 (61.8% expansion)
• Interim Support: Interim Support: 1.0380 (78.6% expansion) to 1.0410 (61.8% expansion)

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