Henry Liu
Former FPA Special Consultant
- Messages
- 473
The plan for Existing Home Sales release from U.S. will be the typical retracement trading method, where we’ll wait for the release and then wait for a decent retracement before getting into a trade. Here is the forecast for this release:
Existing Home Sales Forecast 5.18M Previous 5.66M
ACTION: USD/JPY BUY 5.60M SELL 4.80M
The Trade Plan
Because the Housing sector is one of the most important 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 possible recovery of U.S. housing sector, this release may bring about a strong sentiment of risk appetite if our BUY trigger is hit…
If our buy tradable deviation is hit, or 5.60M figure is released, we should look to BUY USD/JPY (or GBP/JPY) after the release. If our sell tradable deviation is hit, or 4.80M figure is release, we should look to SELL USD/JPY (or GBP/JPY) as risk sentiment should turn towards aversion.
If we do not get a tradable release, we should stay out of the market. I recommend a Retracement Trade strategy to trade this release. For more information:
Henry's Retracement Trade Method
The Market
The New Home Buyer’s credit has ended… This number is expected to be on a downward trend from May 2010's reading. The US housing market is likely to decline and possibly hit a bottom around 4th quarter of 2010. However, there is no expectation for housing sector recovery until the employment readings improve significantly.
With growing number of available inventories and new homes being build, the existing home sales reading should disappoint today.
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.
With European Bank Stress Test scheduled for release tomorrow, we could see some demand for the USD, therefore be careful when you trade against USD today.
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.”
For historical charts and data on US Existing Home Sales:
Historical Chart & Data of US Existing Home Sales
Thanks,
Existing Home Sales Forecast 5.18M Previous 5.66M
ACTION: USD/JPY BUY 5.60M SELL 4.80M
The Trade Plan
Because the Housing sector is one of the most important 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 possible recovery of U.S. housing sector, this release may bring about a strong sentiment of risk appetite if our BUY trigger is hit…
If our buy tradable deviation is hit, or 5.60M figure is released, we should look to BUY USD/JPY (or GBP/JPY) after the release. If our sell tradable deviation is hit, or 4.80M figure is release, we should look to SELL USD/JPY (or GBP/JPY) as risk sentiment should turn towards aversion.
If we do not get a tradable release, we should stay out of the market. I recommend a Retracement Trade strategy to trade this release. For more information:
Henry's Retracement Trade Method
The Market
The New Home Buyer’s credit has ended… This number is expected to be on a downward trend from May 2010's reading. The US housing market is likely to decline and possibly hit a bottom around 4th quarter of 2010. However, there is no expectation for housing sector recovery until the employment readings improve significantly.
With growing number of available inventories and new homes being build, the existing home sales reading should disappoint today.
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.
With European Bank Stress Test scheduled for release tomorrow, we could see some demand for the USD, therefore be careful when you trade against USD today.
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.”
For historical charts and data on US Existing Home Sales:
Historical Chart & Data of US Existing Home Sales
Thanks,
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