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Forex Signal (Wed March 23 2011, 10:00am NY Time EST) - US New Home Sales...

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Mar 22, 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 slightly stronger release today. Here is the forecast:

    10:00am NY Time New Home Sales Forecast 290K Previous 284K
    ACTION: SELL 360K EURUSD BUY 220K 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 February's home sales under considerable pressure, record high inventories, 9.7% drop in new constructions, and 2.4% drop in home prices, nothing is shining positive lights on the U.S. Housing sector for this month.

    With slight improvement in the employment and unemployment rate, we are on the right track for gradual improvements in the housing sector; however, in my opinion we won't see any significant improvements for at least 3 years.

    Additional Thoughts
    Existing Home Sales came out missing expectation, I'd expect similar figures for the New Home Sales.

    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, Mar 22, 2011
    Lasted edited by : Sep 8, 2016

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