With the first time Home Buyer’s Credit ended in April, this release is likely to show a significant decline… Here is the forecast:
10:00am NY Time New Home Sales Forecast 424K Previous 504K
ACTION: USD/JPY BUY 500K SELL 350K
We’ll trade this release using a deviation of 70K; 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 demand, which is showing some signs of consolidation from last 2 weeks’ loss due to worse economic data and muted response over European sovereign debt crisis, a worse than expected release (which is the most likely scenario) might help USD to strengthen due to investors demand for safer investment.
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:
- Forex Strategy For US New Home Sales 05/26/10
- Forex Trading Plan For US New Home Sales 08/25/10
- Forex Strategy For US New Home Sales – August 23, 2011
- US New Home Sales 01/27/10
- US New Home Sales m/m 11/25/09
- Forex News Trading US New Home Sales m/m 05/24/11
- US New Home Sales Forex Trading Plan 10/27/10
- Forex News Trading Plan For US New Home Sales 11/24/10
- Forex News Trading US New Home Sales 02/24/11
- US New Home Sales 02/24/2010
{ 2 comments… read them below or add one }
Hi Henry,
Do you have any idea why the USD/JPY hardly moved at all (i.e. did not meet your 70 pip range) even though there was a major surprise of -70K on the new home sales number?
USD/JPY stood at 90.10-90.00 … which was basically flat.
I was expecting it to fall to about 89.60 or so, but it never came.
Thanks.
ps – duplicate post maybe b/c invalide security code.
This is probably a result of heavy stop orders around the support of 90 on the USD/JPY. Eventually market did break below that, but not immediately. It is sometimes important to take account of context of the market, and in this case a strong psychological support at the 90s.
Henry