Summary:

• US durable goods orders drop sharply to -1.2%
• Core reading rises by 0.4% as forecast
• USD lower on the day as USDJPY approaches possible support

The latest data from the US has come in as a bit of a disappointment with October durable goods orders M/M declining by 1.2% after a rise of 2.0% (revised down from 2.2%) previously and an expected print of 0.4%. 

The core reading came in inline with forecasts in M/M terms at 0.4% and even though there was a substantial upwards revision to the prior reading (1.1% after 0.7% previously) the overall feeling from these releases is one of disappointment. 

In Y/Y terms the longer picture is more readily visible and there is a notable decline seen in the durable good orders after peaking earlier this year. The metric is in danger of dipping back into negative territory and the recovery seen since the lows towards the end of 2015 is now under threat.  

 The durable goods orders have fallen worryingly in recent months and are threatening to drop back into negative territory. Source: XTB Macrobond

The US dollar was already lower on the day heading into the release and the negative data has seen the greenback fall further. USD is dropping against the majority of its with only notable gains for the buck seen against the BRL, TRY and MXN.

 The USD has reacted negatively to the data and is lower against most of its peers on the day. Source: xStation

The USDJPY is currently at an interesting point with the pair falling close to its lowest level in a month at 111.80. This level also coincides with a falling trendline from the high seen last December. Should price fall back below here then there is scope for a further decline with little by the way of swing support until 108.30.

 The USDJPY is testing possible support around 111.80. Source: xStation