EUR/USD Long Trade Setup: Durable Goods Are Out

The U.S. Census Bureau has released its Durable Goods statistics. Not a whole lot of surprises in this batch of numbers, but some short-term volatility has become evident across the majors. As my colleagues Skerdian and Arslan have covered, the EUR/USD is primed for a long trade.

Durable Goods: The Hard Data

Durable Goods is an interesting metric. It measures expenditures on items expected to last three years or more. Refrigerators, ovens, and washing machines are a few examples of these types of goods. A separate measure excluding automobiles is included for a comprehensive view of consumer activity.

Event                                                                        Previous                Projected            Actual

Durable Goods Orders ex Transportation (August)      0.8%                      0.2%                 0.2%

Durable Goods Orders (August)                                 -6.8%                       1.0%                 1.7%

This set of numbers shows the impact that the purchase of automobiles has on the validity of the statistic. Without autos, the number is relatively flat. With autos, we see a major jump over the previous release.

Both statistics are positive for the USD, with automobile stocks poised to jump on the U.S. session cash open.

EUR/USD: Long Trade

No matter what your entry point is, there is likely to be a bullish retracement from the EUR/USD in the near future.

EUR/USD, Weekly Chart.

Not much has changed from the macro perspective facing the EUR/USD. We are in the midst of a three-session sell-off, prompted by last week’s U.S. Federal Reserve announcements. Below is the scenario for today’s long trade:

• Long entry from 1.1695

• Stop loss under August’s low of 1.1662

• 1:1 R/R, with a take profit around 1.1730

Bottom Line: Today’s U.S. economic calendar is filled with upcoming data releases. They should act as a catalyst, driving price to our entry. Price action below 1.1700 should bolster participation and give us a concrete stop out upon today’s close.

As always, trade smart and check back with FX Leaders throughout the trading day!

ABOUT THE AUTHOR See More

Shain Vernier

US Analyst

Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.

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