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Forex Signal (Wed November 24 2010, 10:00am NY Time EST) - US New Home Sales

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Nov 23, 2010.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

    Jul 5, 2010
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    U.S. New Home Sales usually follows the trend of Existing Home Sales, therefore we are likely to see an inline with expectation release. Here is the forecast:

    10:00am NY Time New Home Sales Forecast 310K Previous 307K

    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 or GBPUSD; 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 instead 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
    Liquidity could be drying out as traders in the U.S. take off for Thanksgiving holiday. Recent risk aversion sentiment has been benefiting USD, and so far there are no news catalysts to say otherwise... We'll still follow the general trend in USD strength today.

    Market could be waiting for this release to be out of the way before committing, therefore it is always best to wait until after the release to enter the market.

    Additional Thoughts
    Taking the context of the week and the reaction after FOMC Minutes on Tuesday, USD is going to be in demand... With the much lower liquidity market during US Holiday, we could see some excessive movement, therefore do not get in on any counter-trend trades (such as SELL USD)

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

    “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


    #1 Henry Liu, Nov 23, 2010
    Lasted edited by : Sep 8, 2016
  2. walshak

    walshak Recruit

    Nov 24, 2010
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    hi i just joined ur site hoping that it will give me the necessary guidance i need, cos i have made alot of bad decisions lately. thanks
  3. dappa

    dappa Recruit

    Nov 2, 2010
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    trading news

    hey henry, tell me how do you trade the news when the brokers widen the spread so much at times, how do you get around that? thanks

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