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Forex Signal (Tue May 24 2011, 10:00am NY Time EST) - US New Home Sales m/m

Discussion in 'Current Forex Trading Signals' started by Henry Liu, May 23, 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 305K Previous 300K
    ACTION: SELL 375K EURUSD BUY 235K 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 should reflect a dismal improvement in the housing market. The forecasted number of 305K is a pathetic improvement from last months’ report of 300K. The housing market holds such a grand significance in stabilizing the entire economic market but US home builders remain pessimistic about a timely recovery. Declining real estate values and the mass number of homes which remain unsold means builders will be reluctant to take on new projects. Future forecasts indicate that a strong recovery isn’t expected anytime soon as unemployment holds at 9% and wages remain stagnant.

    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, May 23, 2011
    Lasted edited by : Sep 8, 2016

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