• US durable goods M/M +1.7% vs +1.0% exp
  • USD rising across the board with only crypto escaping declines
  • Gold falls to its lowest level since 24th August; USDJPY breaking higher

Durable goods orders made an impressive recovery for the month of August after falling sharply back in July by 6.8%. A month-on-month rise of 1.7% is clearly influenced in part by the disastrous prior reading but nonetheless it represents a pick-up and leaves the previous print looking more like an anomaly.  

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Durable goods orders have rebounded after a sharp drop previously. Source: XTB Macrobond 

The core reading of 0.2% was inline with the consensus forecast with the prior reading revised higher by 0.1% to 0.6% from 0.5% previously. The release as been warmly greeted by USD bulls with the greenback now rising against all of its peers other than the cryptocurrencies.  

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 The US dollar is rising against all its peers barring the cryptocurrencies. Source: xStation

The initial reaction can be seen in Gold, with the precious metal falling around half a percent in the minutes following the release. The market has now dropped to its lowest level in more than a month and is not far from the next possible support level at 1281. A break below 1281 would open up the chance for further weakness and if 1270 gives way then we would see a retest of the 1251 level int he coming sessions. 1291 is the first level to look for potential resistance should we get a recovery but as long as price remains below here then the shorts will have a chance to push price lower. 

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 Gold has declined to its lowest level in a month following the release. Source: xStation

The USDJPY is benefiting today from both the rise in the greenback and the positive risk sentiment seen in equities. The market has now broken above a falling trendline going back to the year-to-date high at 118.69. Given the sharp rally following the US election prior to this peak, there is a possible long term bull flag in play with today’s break possibly providing the catalyst for the next leg higher.

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 USDJPY has popped to its highest level since mid-July following the release and is back above the 113 handle. A long term bull flag may have been broken out of to the upside. Source: xStation