Our strategy to trade this Existing Home Sales release from U.S. will be the typical retracement trading method, where we’ll wait for the release, wait for market to spike, and then wait for a decent retracement before getting into a trade. Here is the forecast for this release:
10:00am NY Time US Existing Home Sales Forecast 5.28M Previous 5.02M
ACTION: USD/JPY BUY 5.68M SELL 4.88M
Since housing news is one of the most important news events out of the US, this news release will certainly cause some volatility in the market, especially if our tradable figures were hit. With the focus of the nation, and of the world, on the possible recovery of U.S. housing sector, this release may bring about a strong sentiment of risk appetite if our BUY trigger is hit…
It is also important to consider that the New Home Buyer’s credit was extended last year and it will end by May 1, 2010, March and April will be the final stretch for any prospective buyers to get a sales contract (closing could be extended until June 2010), therefore we may actually see a surprise to the upside from this release (March), and from the next (April).
As usual, our deviation is the usual 400K, therefore on a release of 5.68M or better, we’ll be looking to BUY USD; on a release of 4.88M or worse, we’ll be looking to SELL USD… If the number is better, we may even look to SELL EUR/USD instead of USD/JPY as EUR is currently under strong bearish pressure.
Definition:
“Measures the annualized number of existing residential buildings that were sold during the previous month. A rising trend has a positive effect on the nation’s currency because large purchases tend to be made by consumers that are optimistic and confident in their financial position. The sale of a home also triggers commissions for real estate agents, and often home owners will purchase goods such as appliances and furniture shortly after purchasing a home. Traders watch this report closely as it’s the month’s first demand-side housing indicator to be released.”
Related posts:
- Forex Strategy For US Existing Home Sales 07/20/11
- Forex Analysis For US Existing Home Sales 09/21/11
- Forex News Trading US Existing Home Sales 06/21/11
- Forex Strategy For US New Home Sales – August 23, 2011
- Forex News Trading US New Home Sales m/m 04/25/11
- Forex News Trading US New Home Sales m/m 03/23/11
- Forex News Trading US New Home Sales 02/24/11
- Forex Trading News US Existing Home Sales 08/18/11
- US New Home Sales Forex Trading Plan 10/27/10
- Trading Strategy For US New Home Sales 06/23/10
