Durables is one of those psychotic data numbers that oscillate wildly back and worth. Recently, it’s been missing forecasts for a while now.
This is how I’m looking to trade it:
First, background –
*This week has been light on US data and it’s also been mixed (slight negative bias)
* Greece crap is hitting the headlines again and today is going to be noise city.
* The USD Index Futures is at strong support (it dipped below overnight but already back above it)
*German IFO data overnight was pretty good.
If the durables number is REALLY bad – buying the EUR/USD if a good level is offered that still makes sense (price willl have moved substantially).
Price may stall at 1.0900, but we could squeeze to 1.0940/60. I would fade here, especially at the top of the range. Greece headlines would keep some pressure.
If the number is kind of bad (say, bad current number with positive revisions) – Fade 1.0900/20.
If the number is really good – Buy 1.0750 (key level and now also 61% fib of this last rally) .
If the number is just inline – We would probably get some selling and I would buy sub 1.0800 (1.0770s best entry).
Overall, the bull flag on the EUR/USD from 1.0518 is still there. USD was also sold heavily yesterday. People are looking to sell again if possible.
And for god’s sake, don’t hold EUR/USD leveraged positions over the weekend. Stuff could happen and gap on Monday.