Forex Signal (Thu September 23 2010, 10:00am NY Time EDT) - US Existing Home Sales

Henry Liu

Former FPA Special Consultant
Messages
473
US Existing Home Sales is expected to decline from previous month as current market situation is adding more pressure to the housing sector. Here's forecast:

Existing Home Sales Forecast 4.11M Previous 3.83M
ACTION: USD/JPY BUY 4.5M SELL 3.70M

The Trade Plan

Because the Housing sector is one of the most focused news events out of the US, this release will certainly cause some volatility in the market, especially if our tradable figures (+/- 400K) were hit. With the focus of the nation, and of the world, on the status of U.S. housing sector, this release may bring about a strong sentiment of risk appetite/aversion if our BUY/SELL trigger is hit…

If our buy tradable deviation is hit, or 4.50M figure is released, we should look to BUY USD/JPY (or GBP/JPY) after the release. If our sell tradable deviation is hit, or 3.70M figure is release, we should look to BUY EURUSD (or GBP/USD) as USD should be sold off again.

We'll be looking to trade this release using the after-news retracement trading method. We'll wait for the release, wait for market reaction, and wait for retracement before jumping in. For more information:
Henry's News Trading Method.

The Market
The outlook for US Housing sector is bleak at best, with last month's release showing an alarming drop of 27% due to the expiration of home buyer's tax credit. However, we are expecting to see about 7.1% increase from last month's figure, probably due to the sharp drop. But this small uptick is likely to provide no relief and the housing sector should remain under pressure for at least until late 2011 due to the over supply of both existing and new home inventories, tough credit conditions, high unemployment rate, and record number of initial jobless claims.

Additional Thoughts
This release is scheduled at 10:00am US Time, it is the last high impact news for the NY session, we could see some exaggerated market movements as traders may just wait for this release to be out of the way before committing to a position.

Pre-news Considerations
Since the general sentiment for this housing sector is pretty much unchanged, and being that this is not a trend changing event, I'd stay away from pre-news.

Definition:
“Measures the annualized number of existing residential buildings that were sold during the previous month. A rising trend has a positive effect on the nation’s currency because large purchases tend to be made by consumers that are optimistic and confident in their financial position. The sale of a home also triggers commissions for real estate agents, and often home owners will purchase goods such as appliances and furniture shortly after purchasing a home. Traders watch this report closely as it’s the month’s first demand-side housing indicator to be released.”

Historical Data & Chart For US Existing Home Sales


Thanks,


 
Last edited by a moderator:

riki143

Spamming for FBS in General Forex Talk
Messages
125
Thx u so much for u analysis Mr Liu...but i m still confuse about what next step by usd/jpy? signal to buy or sell? thx u..:)
 

SAMMYFX

Corporal
Messages
76
A change from the usual.

I think there has been a little change from the usual way Sir Pipsalot, Crazy Cat and Felix sets out these news. The average pip movement is not given by Henry. I believe it is not enough to tell us to either buy or sell without an exit strategy as has always been the case.

Felix's retracement strategy was wonderful. TP and SL are all detailed for members of this forum. I wish Henry could adopt such a style because I truly believe he does Have an exit strategy for each tradeable news.
 

Sebastine Abang

Recruit
Messages
2
Appreciation

Mr. Liu, i want to appreciate u for ur news analysis, its gradually building me up a better trader. May God bless u and continue to give you d wisdom for better analysis
 

C. Collins

Private
Messages
20
CFTC Restrictions

Henry,
Great job always do well with your information.....Please can you tell me what you've heard about the new CFTC restrictions on trading forex in the U.S.?
Thanks, C. Collins
 

mauricio.sousa

Recruit
Messages
2
how many pips I expect to win??

Please
how many pips I expect to win??

(Sorry for my bad english)


Thanks!
 
Last edited:

Punle

Recruit
Messages
4
Hi Henry. Thanks for all the information. I just started, and I'm trying different thing. I wanted to know if you post your results anywhere, showing where you finally entered the trade. It would help me understand the retracement method.
 
Top