The Core Durable Goods Orders indicator measures the change in purchase orders for durable goods, excluding transportation items. A reading which is higher than the market forecast is bullish for the dollar.
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Wednesday at 12:30 GMT.
Indicator Background
Core Durable Goods is an important economic indicator, as an increase in orders from manufacturers indicates stronger activity in the manufacturing sector.
The indicator was a major disappointment in February, plunging by 3.2%, despite a flat market forecast of 0.0%. This was the poorest reading dating back to February 2011. The markets are predicting a healthy rebound in March, with a forecast calling for a 1.5% increase.
Sentiments and levels
Although an agreement has been finally hammered out on the Greek bailout, the crisis is still not over, with the IMF threatening to cut off aid if Greece doesn’t make further cuts. Other eurozone countries, notably Portugal, are in deep trouble as well. In the US, the slow but steady recovery continues, with the economy producing strong employment numbers. Thus, the overall sentiment is bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.3550, 1.3486, 1.3437, 1.3360, 1.33, 1.3212 and 1.3080.
5 Scenarios
- Within expectations: 1.1% to 1.9%. In such a scenario, EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 2.0% to 2.4%: An unexpected higher reading could push the pair below one support level.
- Well above expectations: Above 2.4%: The chances of such a scenario are low. Such an outcome would push EUR/USD downwards, and a second support level might be broken as a result.
- Below expectations: 0.7% to 1.0%: A lower figure than predicted could cause the pair to drop and break one resistance line.
- Well below expectations: In this scenario, EUR/USD will likely climb and could break a second resistance line.
For more on the Euro, see the EUR/USD.