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 slightly stronger release today. Here is the forecast:
10:00am NY Time New Home Sales Forecast 330K Previous 329K
ACTION: SELL 400K EURUSD BUY 260K EURUSD
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 BUY EURUSD; if the number is higher, it could provide a temporary support for the pair and we may see a slight rally in USD/JPY and we could SELL EURUSD if the market is showing bias towards selling Euro.
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 yesterday's Existing Home Sales surprising the market with a 90K+ deviation, we could see similar trend in the New Home Sales today... Of course, current US economy is still struggling and I do expect to see the housing market to be lagging the recovery, therefore unless we get our tradable deviation, it's probably best to stay out of the market.
Additional Thoughts
With average home prices falling 2.4% for the same period as reported by Case Shiller, it is likely that the current trend for Home Sales may just not be enough to change market perception of a lagging housing sector.
Pre-news Consideration
There is no pre-news for this release.
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 330K Previous 329K
ACTION: SELL 400K EURUSD BUY 260K EURUSD
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 BUY EURUSD; if the number is higher, it could provide a temporary support for the pair and we may see a slight rally in USD/JPY and we could SELL EURUSD if the market is showing bias towards selling Euro.
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 yesterday's Existing Home Sales surprising the market with a 90K+ deviation, we could see similar trend in the New Home Sales today... Of course, current US economy is still struggling and I do expect to see the housing market to be lagging the recovery, therefore unless we get our tradable deviation, it's probably best to stay out of the market.
Additional Thoughts
With average home prices falling 2.4% for the same period as reported by Case Shiller, it is likely that the current trend for Home Sales may just not be enough to change market perception of a lagging housing sector.
Pre-news Consideration
There is no pre-news for this release.
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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