When are the US durable goods orders and how could they affect USD/JPY?

US durable goods orders overview

Wednesday's US economic docket also features the release of durable goods orders data for October. The US Census Bureau is scheduled to release the monthly report at 13:30 GMT. Having recorded a 1.2% decline in September, consensus estimates point to yet another fall by 0.8% during the reported month. Excluding transportation items - core durable goods orders, which tend to have a broader impact than the volatile headline figures, are anticipated to recover from the previous month's fall of 0.4% and post a modest rise of 0.1% in October.

Meanwhile, non-defence capital goods orders excluding aircraft and parts - a proxy for business investment – are projected to fall 0.3% in October as compared to a downwardly revised reading of -1.3% prior. As Joseph Trevisani, FXStreet's own Analyst explains: “Business spending has not yet recovered but if the agreement between the US and China is signed by President’s Trump and Xi that would be anticipated in the first half of 2020. The dollar will benefit as returning business investment will push GDP towards 3% in the first quarter.”

How could it affect USD/JPY?

According to Valeria Bednarik, the Chief analyst at FXStreet: “The USD/JPY pair is trading just above the 23.6% retracement of its latest bullish run at around 109.10, the immediate support. In the 4-hour chart, the pair is developing above all of its moving averages, with the 20 SMA advancing above the larger ones. Technical indicators have lost strength upward, but remain within positive levels, rather reflecting the lack of interest than suggesting upward exhaustion. The main bullish target is 109.48, this month high, while relevant support comes at 108.85, the 38.2% retracement of the mentioned rally.”

Key Notes

   •  US October Durable Goods Orders Preview: The revival in business investment is not yet in sight

   •  USD/JPY Forecast: Waiting for US data at weekly highs

   •  USD/JPY continues to hold above 109 as focus shifts to US data dump

About US durable goods orders

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.