US New Home Sales 01/27/10

10:00am (NY Time) US New Home Sales   Forecast 372K  Previous 355K
ACTION: USD/JPY or USD/CHF        BUY 440K    SELL 300K

We’ll be looking to the the New Home Sales, which is expected at 372K; our tradable deviation is going to be 70K, so if the release is lower, it would strengthen risk aversion sentiment and we should look to SELL USD/JPY or possible the USD/CHF pair; if the number is higher, it would fuel risk appetite sentiment, we may see a rally in USD/JPY or USD/CHF. 

However, with the current predominant risk aversion sentiment in the market, we may see more volatility if the release corresponds to the same sentiment, especially with the recent JPY strength beyond the support levels…  Therefore I’d recommend a quick profit taking on a better than expected 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.”

Related posts:

1. US New Home Sales m/m 11/25/09
2. US New Home Sales 02/24/2010
3. US New Home Sales 03/24/2010
4. Trading Strategy For US New Home Sales 06/23/10
5. Forex Trading Plan for US New Home Sales 04/23/10
6. Forex Strategy For US New Home Sales 05/26/10
7. US Core Retail Sales m/m 11/16/09
8. US Core Retail Sales m/m 10/14/09
9. US Core Retail Sales m/m 09/15/09
10. US New Home Sales – 06/24/09