U.S. Durable Goods Orders Tops Expectations in September

U.S. Durable Goods Orders Tops Expectations in September

Durable goods orders in the world's largest economy jumped 3.3 percent in September after falling a revised 1.9 percent the month prior amid expectations of 0.5 percent, while orders excluding transportation unexpectedly tumbled 0.8 percent. Indeed, transportation equipment was the main driver behind today's report, while inventories added 0.5 percent for the month. Subsequent to the report, the EURUSD rallied, but the advance quickly reversed course as price action remains capped by the 20-day moving average. At the same time, U.S. equity futures continued their southern journey as risk aversion regains its footing.

The report is of great importance due to the fact that durable goods orders are expected to last more than five years, and in turn reflect optimism in the economy. It is noteworthy that the headline figure was driven by Boeing orders as the world's largest airplane maker received 117 orders in September from 10 orders in August. Taking a look at the breakdown of the release, unfilled orders added 0.1 percent to mark the sixth successive increase, while core capital goods shipments rose 0.4 percent.

U.S. Durable Goods Orders

Source: Bloomberg

In the currency markets, the EURUSD initially rallied, but quickly reversed course. Indeed downside risks remain so long as price action can remain capped by the 20-day moving average. As of late, technical indicators continue to point to further declines. The MACD has crossed over to the downside last week, while the parabolic SAR signaled for losses around the same period. With the trendiness likely to test 1.3600, I will look to remain short this pair.

EURUSD Daily Chart

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