With the first time Home Buyer’s Credit ending in April, this release is the final stretch for U.S. homeowners to claim that credit. Therefore, we could see a stronger than expected release this month. Here is the forecast:
10:00am NY Time New Home Sales Forecast 425K Previous 411K
ACTION: USD/JPY BUY 500K SELL 350K
Our plan to trade this release is to use a tradable deviation of 70K, and if the release is lower, it would strengthen risk aversion sentiment and we should look to SELL USD/JPY; if the number is higher, it could provide a temporary risk appetite sentiment, we may see a slight rally in USD/JPY and provide a chance to go short on JPY crosses.
However, it is important to consider the current USD strength as a result of the European uncertainty due to Spanish Banking issues, market could demand for a stronger USD either way… Therefore we’ll should be absolutely sure before we take a SELL on USD… (As USD is a safe haven currency, on a weak release we could see a strong USD because of risk aversion, but on a stronger release, given the issues in Spain, Euro may be sold off against USD as the green back appears more attractive, at least temporarily).
If we get an inline with expectation release, expect to see market resume pre-release trends… With this being the last high impact release for the NY session, we could see some delayed market reaction waiting for this release move out of the way…
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:
- Trading Strategy For US New Home Sales 06/23/10
- Forex Strategy For US New Home Sales – August 23, 2011
- US New Home Sales 03/24/2010
- Forex Trading Plan for US New Home Sales 04/23/10
- Forex Trading Plan For US New Home Sales 08/25/10
- US New Home Sales 01/27/10
- US New Home Sales m/m 11/25/09
- US New Home Sales 02/24/2010
- Forex News Trading US New Home Sales m/m 03/23/11
- Forex News Trading US New Home Sales 02/24/11
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