US New Home Sales | October 24, 2013 | Currency Trading
US New Home Sales measures the new housing market, and judging from today’s forecast versus previous month’s forecast (427 v 497), market is definitely not optimistic at this time, and considering the US government partial shutdown during the last 2 weeks, the future New Home Sales figure is likely to be subdued as well…
Here is the forecast:
10:00am NY Time New Home Sales Forecast 427K Previous 421K
DEVIATION: 70K (BUY USD 497K / SELL USD 357K)
The Trade Plan
We´ll trade this release using a deviation around 70K; if the release is lower, it would strengthen USD aversion sentiment and we should look to SELL USD. A stronger number could provide temporary support for the USD and we may see a slight rally therefore we should look to BUY USD.
We´ll be looking for a possible after-news retracement trade. We need to wait for the release, then wait for the market to spike, and wait for decent retracement. This is the 3 “W”s of the Retracement Trading system. It´s especially important to make sure there is momentum during the spike before jumping in. For more information, read: https://www.currencynewstrading.com/how-to-get-started-with-news-trading/
I’d recommend to use the Recommended Pairs from above as they are based on my CSM, which should provide the best combination of currency pairs to trade based on better/worse news… of course, you can also trade the default pair: EURUSD.
[ffoscore currency=’USD’]
Outlook Score
Outlook score is derived from market sentiment, focus, and economic indicators for the currency. It represents the long-term trend of the currency and its market perception. In short, a strong Outlook Score means more long-term demand for the currency, and a weak Outlook Score is the opposite.
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.”
Thanks,
