US Dollar Recovers As Existing Home Sales Exceeded Expectation

US Dollar Recovers As Existing Home Sales Exceeded Expectation

By: Simon Furman | Where To Trade | On:21-10-2014 10:44
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Key Highlights

  • US existing home sales data registered an increase of 2.4% in September 2014, compared to the last time decline of 1.8%.
  • This is the highest pace in sales of 2014, which got the attention of the US dollar buyers.
  • Impressive Chinese data failed to keep the risk sentiment alive, as most pairs were seen trading lower during the NY session.
  • UK public sector net borrowing was released by the National Statistics, which came in at £12.6B, up from the previous reading of £10.883B.
  • Euro was seen trading lower after the US existing home sales report, and currently heading towards the 1.2720 support area.
  • NZDUSD after trading as high as 0.8032 fell back towards the 0.7970 level.

 

US Existing Sales

Earlier during the NY session, the US Existing Home Sales was released by the National Association of Realtors. The market was expecting the US Existing Home Sales to increase by 1% in September 2014, compared with the last month. However, the US Existing Home Sales registered an increase of 2.4% to a seasonally adjusted annual rate of 5.17 million in September. The outcome was certainly on the positive side. NAR chief economist, Lawrence Yun mentioned in the report that “traditional buyers are entering a less competitive market with fewer investors searching for available homes, but may also face a slight decline in choices due to the fact that inventory generally falls heading into the winter."

 

Where To Trade - Existing home sales

Moreover, the report highlighted that total housing inventory decreased by 1.3 percent to 2.30 million in September 2014. This finally came as a relief for the greenback. The US dollar was seen trading higher immediately after the release, and the EURUSD pair was the worst performer. It has moved lower by around 80 pips or so since the start of the day. As I mentioned earlier, the pair has an important support around the 1.2720-30 levels. Let us see how the US dollar trades in the coming sessions, and whether it can keep the momentum going or not.

 

Swiss Trade Balance

There was no major release during the London session today especially in the UK and Euro zone. However, the Swiss imports, exports and trade balance data was released by the Federal Customs Administration earlier today. The outcome was on mostly on the positive side despite it came below the expectation. There was a trade surplus of 2452M, which was a lot more than the last time. This weighed on the USDCHF pair, and it finally managed to get some sellers. Some other pairs such as GBPCHF and AUDCHF were affected as well.

Technically, the USDCHF pair is struggling to clear the 0.9500 swing resistance area, which is acting as a monster resistance for the pair. There is a chance of one more move lower in the coming sessions. On the downside, the 0.9440 is a major support. So, the pair is stuck in a range and it needs a solid momentum for a break higher or lower.

Simon Furman

Simon Furman

Think Global - Act Local

Simon Furman is one of the best financial analyst with 27 years of trading experience

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