Henry Liu
Former FPA Special Consultant
- Messages
- 473
U.S. New Home Sales usually follows the trend of Existing Home Sales, therefore we are likely to see a worse than expected figure. Here is the forecast:
10:00am NY Time New Home Sales Forecast 333K Previous 330K
ACTION: USD/JPY BUY 400K SELL 260K
The Trade Plan
We’ll trade this release using a deviation of 70K; if the release is lower, it would strengthened risk aversion sentiment and we should look to SELL USD/JPY; if the number is higher, it could provide a temporary support for the pair and we may see a slight rally in USD/JPY.
We'll be looking for a possible after-news retracement trade. As I have explained in previous analysis, we need to wait for the release, wait for the market to spike, and wait for decent retracement. This is the 3 "W"s of Retracement Trading system. It is especially important to make sure there is a momentum during the spike before jumping in. For more information, read:
Henry's News Trading Method.
The Market
With the general market in risk aversion sentiment, we'll probably see continous demand for USD and JPY. U.S. Housing sector should still remain under pressure because of high unemployment rate, low consumer consumption, tight credit conditions, and supply outpacing demands, not mentioning the expiration of New Home Buyer's Credit...
Additional Thoughts
Taking the context of both Asian and European sessions, we may not get much movement from this release if we see excessive reaction coming into NY Session. Therefore use caution even when we get our tradable release.
Pre-news Consideration
There is no pre-news for this release. But the general theme is for risk aversion, therefore I'd expect to see stronger JPY and stronger USD throughout the day.
Definition:
“Measures the annualized number of new residential buildings that were sold during the previous month. A rising trend has a positive effect on the nation’s currency because the housing market is a leading gauge for the overall economy. A high level of housing activity signals that the construction industry is healthy and that consumers have the capital to make large investments. More importantly, new housing activity creates an economic ripple effect as home owners buy goods such as appliances and furniture for their homes, and builders buy raw materials and hire more workers to meet demand.”
Historical Chart & Data For US New Home Sales
Thanks,
10:00am NY Time New Home Sales Forecast 333K Previous 330K
ACTION: USD/JPY BUY 400K SELL 260K
The Trade Plan
We’ll trade this release using a deviation of 70K; if the release is lower, it would strengthened risk aversion sentiment and we should look to SELL USD/JPY; if the number is higher, it could provide a temporary support for the pair and we may see a slight rally in USD/JPY.
We'll be looking for a possible after-news retracement trade. As I have explained in previous analysis, we need to wait for the release, wait for the market to spike, and wait for decent retracement. This is the 3 "W"s of Retracement Trading system. It is especially important to make sure there is a momentum during the spike before jumping in. For more information, read:
Henry's News Trading Method.
The Market
With the general market in risk aversion sentiment, we'll probably see continous demand for USD and JPY. U.S. Housing sector should still remain under pressure because of high unemployment rate, low consumer consumption, tight credit conditions, and supply outpacing demands, not mentioning the expiration of New Home Buyer's Credit...
Additional Thoughts
Taking the context of both Asian and European sessions, we may not get much movement from this release if we see excessive reaction coming into NY Session. Therefore use caution even when we get our tradable release.
Pre-news Consideration
There is no pre-news for this release. But the general theme is for risk aversion, therefore I'd expect to see stronger JPY and stronger USD throughout the day.
Definition:
“Measures the annualized number of new residential buildings that were sold during the previous month. A rising trend has a positive effect on the nation’s currency because the housing market is a leading gauge for the overall economy. A high level of housing activity signals that the construction industry is healthy and that consumers have the capital to make large investments. More importantly, new housing activity creates an economic ripple effect as home owners buy goods such as appliances and furniture for their homes, and builders buy raw materials and hire more workers to meet demand.”
Historical Chart & Data For US New Home Sales
Thanks,
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