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Forex Signal (Tue July 26 2011, 10:00am NY Time EST) - US New Home Sales m/m

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Jul 25, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    US New Home Sales usually follows the trend of Existing Home Sales, therefore we’re likely to see a slightly stronger release today.

    Here is the forecast:

    10:00am NY Time New Home Sales Forecast 320K Previous 319K
    ACTION: 390K SELL EURUSD / 250K BUY EURUSD


    The Trade Plan
    We’ll trade this release using a deviation of 70K; if the release is lower, it would strengthen risk aversion sentiment and we should look to BUY EURUSD. A stronger number could provide temporary support for the pair and we may see a slight rally in USD/JPY enabling us to SELL EURUSD.

    We’ll be looking for a possible after-news retracement trade. We need to wait for the release, then wait for the market to spike, and wait for decent retracement. This is the 3 “W”s of the Retracement Trading system. It’s especially important to make sure there is momentum during the spike before jumping in. For more information, read:
    Henry Liu's Trading Method

    The Market
    Today’s release of US New Home Sales is likely to fall inline with analysts' expectation of around 320K. The housing market remains under pressure in June, especially with recent Employment data showing only 18K of new jobs created and Unemployment Rate moved higher to 9.2%.

    The Existing Home Sales figure released last week showed the lowest number in months, therefore we may see a similar result for the New Home Sales figure, but probably not enough to hit our surprise factor.

    Additional Information
    With US Debt Ceiling Debate still in the headline, a worse than expected release in today's housing number could once again drive risk aversion up and send USD lower against other safe-haven alternatives.

    Pre-news Consideration
    There is no pre-news for this release.

    Definition of New Home Sales
    “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 and Data for US New Home Sales m/m



    Thanks,


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    #1 Henry Liu, Jul 25, 2011
    Lasted edited by : Sep 8, 2016

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