US Dollar Dives Post Goods Orders Report

Key Highlights

• US durable goods orders released by the US Census Bureau registered a decline of 1.3% in September 2014, compared with the expectation of a rise by 0.5%.
• US CORE durable goods orders also registered a decline of 0.2% in September 2014, compared with the expectation of a rise by 0.5%.
• German import price index released by Deutsche Bundesbank registered an increase of 0.3% in September 2014 whereas the market was expecting it to decline by 0.1%.
• Italian business confidence climbed from the previously revised reading of 95.5 to 96.0, compared with the expectation of a decline to 94.9.
• EURUSD pair surged higher and broke an important resistance area after the releases in the US.
• US dollar was broadly seen trading lower after the release, as the market failed to digest horrible durable goods orders report.

US Durable Goods Orders

Earlier during the NY session, the US durable goods orders report was released by the US Census Bureau. The market was expecting the US durable goods orders to register a rise of 0.5% in September 2014. However, the outcome was very disappointing, as durable goods orders registered a decline of 1.3%.  There were some other aspects as well, including the core durable goods orders, durables excluding defense and goods orders non-defense excluding air. All sectors came as a disappointment. The US core durable goods orders fell by 0.2% whereas the market was expecting it to rise by 0.5%. There was a positive side of the report as well, as there were a few revisions for the last readings.

This was not all as the S&P/Case-Shiller House Price Index was also released after a few minutes. The market was expecting the S&P/Case-Shiller House Price Index to register a rise of 5.8% in August 2014. However, the outcome was a touch lower as it registered an increase of 5.6%. This was down from the previous reading of 6.7%.

Overall, the US dollar was seen trading lower, as the economic releases missed the mark for the second time in a row. The EURUSD pair tested the 1.2760 area as of writing and AUDUSD blasted above 0.8850 level.

London Session Recap

There was no major release during London session. Some of the low-risk events include the German import price index which was released by Deutsche Bundesbank. The market was expecting the German import price index to decline by 0.1% in September 2014, compared to the last month. However, the outcome was a bit encouraging, as the German import price index increased by 0.3%. When we consider the yearly change, then it declined by 1.6% in September 2014, compared with the same month of the previous year. The market was expecting it to decline by 2.0%. The Italian consumer confidence was also released, which came in at 96.0, up from 95.5.

Technically, the EURUSD pair has managed to clear an important resistance of 1.2720, which might act as a support moving ahead. The next level of interest is around the 1.2820 level.

More Fundamental Analysis