The greenback traded in a narrow range against the euro despite the release of slightly better-than-anticipated durable goods orders and pending home sales data for May. As the market is concerned about a likely recession in the US, the greenback was unable to gain momentum against its rivals, including the euro. There were no other major economic releases yesterday. Overall, the EUR/USD pair traded in a narrow range of between 1.055 and 1.0590 in the last 24 hours.
According to the US Census Bureau, the country’s durable goods orders rose by 0.70% m-o-m in May, following a rise of 0.50% in April, and delighted economists who were expecting a slowdown in durable goods orders growth to 0.10%.
In value terms, fresh orders for manufactured durable goods grew by $1.90 billion to $267.20 billion. The increase reflected the seventh month of growth in the past eight months.
Excluding volatile goods such as transportation, the country’s core durable goods orders inched higher by 0.70% m-o-m in May, following an increase of 0.40% in the prior month. Economists did not anticipate any change in April’s growth rate.
Additionally, excluding defense, fresh orders edged higher by 0.60%. Transportation equipment, which recorded two successive months of growth, led the rise at 0.80% (or $0.70 billion) to $87.60 billion.
Shipments of manufactured durable goods surged 1.30% (or $3.60 billion) to $268.40 billion, reflecting the 12th increase in the past 13 months. In April, shipments of manufactured durable goods inched 0.30% higher. Transportation equipment led the rise with a growth of 2.10% (or $1.70 billion) to $84.70 billion. The reported figure reflects the seventh increase in the past eight months.
According to the data published by the US National Association of Realtors (NAR), the country’s pending home sales increased 0.70% m-o-m in May, following a decline of 4% in the prior month. The reported figure reflects the first rise after six consecutive months of declines. Economists anticipated pending home sales to decline by 3.50% in the reported month.
Correspondingly, the pending home sales index (PHSI) inched higher to 99.90 in May. On a y-o-y basis, transactions declined 13.60%.
Commenting on the data, NAR Chief Economist Lawrence Yun said, “Contract signings are down sizably from a year ago because of much higher mortgage rates.”
The NAR also stated that the monthly mortgage payment of a median single-family home price has increased by roughly $800 since the start of 2022, reflecting a 2.50% rise in mortgage rates during the same period.
The better-than-anticipated durable goods orders and home sales data are expected to keep the US dollar range-bound with a slight bullish bias against the euro in the near term.
The historical price chart indicates that the EUR/USD pair is ascending after testing the support at 1.0490. The next resistance is anticipated only near 1.0750. Additionally, the currency pair is trading above its 50-day moving average while the MACD indicator is showing a positive reading. Therefore, we are anticipating the EUR/USD pair to remain in an uptrend for the next few trading sessions.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
