US Existing Home

NEWS TRADING
Thursday April 19, 2012
[10:00am NY Time]


US Existing Home Sales is expected to rise slightly from the
previous month as current foreclosure rate is still
remaining resiliently high. Here's the forecast:

10:00am Existing Home Sales
Forecast 4.62M Previous 4.59M
ACTION: USDJPY BUY 5.00M / GBPUSD BUY 4.20M



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.”


The MarketThe global market is torn between concerns over European debt crisis and the sharp rise in commodity prices, combined with the negative surprise in the U.S. employment sector, today’s number is expected to be inline or slightly worse than expected… should there be a positive surprise, market should turn quickly to risk.


The Trade PlanBecause the Housing sector is one of the most foundamental components of the U.S. economy, this release will certainly cause some volatility in the market, especially if our tradable figures (+/- 400K) were hit. With the focus of world on the status of U.S. housing sector, this release may bring about a strong sentiment of risk appetite/aversion if our BUY/SELL trigger is hit…
If our buy tradable deviation is hit, or 5.00M figure is released, we should look to BUY USDJPY after the release. If our sell tradable deviation is hit, or 4.20M figure is released, we should look to BUY GBPUSD.


Additional ThoughtsThis release is scheduled at 10:00am US EST time, usually it is the last high impact news for the NY session, so we may see more volatile market regardless of the release figure because many traders may just be waiting for this news to be out of the way first.

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