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Forex Signal (Wed January 26 2011, 10:00am NY Time EST) - US New Home Sales

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Jan 26, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

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    U.S. New Home Sales usually follows the trend of Existing Home Sales, therefore we are likely to see a strong release today. Here is the forecast:

    10:00am NY Time New Home Sales Forecast 300K Previous 290K
    ACTION: SELL 370K EURUSD BUY 230K 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 last week's Existing Home Sales surprising the market with a 400K+ deviation, we could see similar trend in the New Home Sales today... Of course, current market is still remaining neutral to slightly bullish against the USD, especially with FOMC Meeting scheduled to come out at 2:15pm today...

    Additional Thoughts
    Unless we get an overwhelming sentiment as a result of a huge deviation, 70K or more, we should stay out of the market because of the upcoming FOMC Meeting.

    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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    #1 Henry Liu, Jan 26, 2011
    Lasted edited by : Sep 8, 2016

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