When are the US macro releases and how could they affect EUR/USD?

US economic data overview

Thursday’s US economic docket highlights the releases of the preliminary (second estimate) of Q1 GDP print, Durable Goods Orders and Initial Weekly Jobless Claims, scheduled at 12:30 GMT. The US economy is anticipated to have expanded by 6.5% during the January-March period, slightly higher than the advance estimates of 6.4%.

Separately, the US Durable Goods Orders are expected to have increased by 0.7% in April as against the 1% rise recorded in the previous month. Orders ex-transportation and Nondefense Capital Goods Orders ex-aircraft, both are projected to rise by 0.8% during the reported month, down from March’s 2.3% and 1%, respectively.

Meanwhile, Initial Jobless Claims are forecast to drop to 425,000 during the week ended May 21, down from the previous week’s reading of 444,000. Continuing Claims are expected to fall to 3.68 million from 3.751 million previously.

How could it affect EUR/USD?

Ahead of the key releases, the US dollar witnessed a modest pullback from one-week tops and eroded a part of the previous day’s goodish recovery gains from the lowest level since January. Investors seem convinced that the Fed will retain its ultra-lose monetary policy stance for a longer period. This, in turn, was seen as a key factor that continued acting as a headwind for the greenback. That said, a stronger reading might fuel speculations that the Fed will need to start discussing plans to reduce the pace of bond purchases. This would be enough to trigger a fresh bout of the USD short-covering move and set the stage for some meaningful downside for the EUR/USD pair.

Meanwhile, Yohay Elam, Analyst at FXStreet offered a brief technical outlook for the major and writes: “Euro/dollar has slipped under the uptrend support line that accompanied it since mid-May and also dropped under the 50 Simple Moving Average on the four-hour chart. While momentum remains positive the currency pair is holding above the 100 and 200 SMAs, bulls are losing some ground.”

Yohay further provided important technical levels to trade the pair: “Support awaits at the daily low of 1.2175, followed by 1.2155, 1.2105 and 1.2075. Some resistance is at 1.22, which is the daily high. It is then followed by the former triple top of 1.2245, and then by the May peak of 1.2266.”

Key notes:

   •  US Durable Goods Orders April Preview: Jobs should equal spending

   •  EUR/USD Forecast: Euro loses uptrend support, fear of the Fed and US data could send it lower

   •  EUR/USD Analysis: Signs of bullish exhaustion emerge, US data eyed for fresh impetus

About the US economic data

The Gross Domestic Product Annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. GDP Annualized is a gross measure of market activity because it indicates the pace at which a country’s economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for the USD, while a low reading is negative.

The Durable Goods Orders, released by the US Census Bureau, measures the cost of orders received by manufacturers for durable goods, which means goods planned to last for three years or more, such as motor vehicles and appliances. As those durable products often involve large investments they are sensitive to the US economic situation. The final figure shows the state of US production activity. Generally speaking, a high reading is bullish for the USD.

The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market which influences the strength and direction of the US economy. Generally speaking, a decreasing number should be taken as positive or bullish for the USD.


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