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- U.S. Durable Goods Orders to Rebound 0.6.% in March.
- Non-Defense Capital Goods Orders ex Aircrafts to Climb 0.3% After Contracting -1.4% in February.
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Trading the News: U.S. Durable Goods Orders
A 0.6% rebound in orders for U.S. Durable Goods may heighten the appeal of the greenback and spur a bearish retraction in EUR/USD as it raises the fundamental outlook for the world’s largest economy.
What’s Expected:
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Why Is This Event Important:
Signs of a stronger recovery may encourage bets for a mid-2015 Fed rate hike, but the recent slew of weaker-than-expected data prints may encourage the central bank to further delay its normalization cycle in an effort to combat the ongoing slack in the real economy.
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Expectations: Bullish Argument/Scenario
| Release | Expected | Actual |
| U. of Michigan Confidence (APR P) | 94.0 | 95.9 |
| Average Hourly Earnings (YoY) (MAR) | 2.0% | 2.1% |
| Personal Spending (FEB) | 0.3% | 0.4% |
Improved confidence paired with the uptick in wage growth may generate greater demand for large-ticket items, and a positive development may boost interest rate expectations as the Fed remains on course to remove the zero-interest rate policy (ZIRP).
Risk: Bearish Argument/Scenario
| Release | Expected | Actual |
| Consumer Price Index Core (YoY) (MAR) | 1.7% | 1.8% |
| Advance Retail Sales (MoM) (MAR) | 1.1% | 0.9% |
| Personal Spending (FEB) | 0.2% | 0.1% |
However, fading discounts along with the ongoing weakness in household spending may drag on orders for durable goods, and a dismal print may dampen the appeal of the greenback as it raises the Fed’s scope to retain its current policy beyond mid-2015.
How To Trade This Event Risk(Video)
Bullish USD Trade: Orders Rebound 0.6% or Greater
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Need to see red, five-minute candle following the release to consider a short trade on EURUSD
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If market reaction favors a long dollar trade, sell EURUSD with two separate position
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Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
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Move stop to entry on remaining position once initial target is hit; set reasonable limit
Bearish USD Trade: Demand for Durable Goods Falter
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Need green, five-minute candle to favor a long EURUSD trade
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Implement same setup as the bullish dollar trade, just in the opposite direction
Potential Price Targets For The Release
EUR/USD Daily Chart
Chart - Created Using FXCM Marketscope 2.0