US Dollar Surged Post Impressive New Sales Report

US Dollar Surged Post Impressive New Sales Report

By: Oliver Miller | Where To Trade | On:24-09-2014 13:34
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Key Highlights

  • US new home sales data released about an hour ago registered an increase of 18% in August 2014, compared to the previous month.
  • The US new home sales seasonally adjusted annual rate was 504,000 in August 2014.
  • Italian trade balance registered softer-than-expected surplus of 1.727B euros in August 2014.
  • German IFO business climate index fell more than expected in September 2014 and currently stands at 104.7.
  • EURUSD pair failed around the 1.2860 level and looks set for more downside in the near term.

US New Home Sales

The number of new home sales in the US was released by the US Census Bureau. The market was expecting a gain of 4.4%, but the outcome was much higher than expected, as it registered an increase of 18% in August 2014. The current gain is 16.3% more than the July’s gain, according to the U.S. Census Bureau and the Department of Housing and Urban Development. The average sales price was $347,900 and the median price was $275,600. There were some revisions as well on the positive side. The previous reading was a decline of 2.4%, but according to the recent revision it was a gain of 1.9%. So, overall the report was very encouraging and should help the greenback in the near term. The outcome was enjoyed by the US dollar buyers, and the biggest loser turned out to be the Euro, as the EURUSD pair traded below the 1.2800. There is a major support around the 1.2750 level, and it will be interesting to see how the pair would react if it reaches the mentioned level.

There were some other pairs as well, which were affected after the release, including the GBPUSD and USDJPY. The USDJPY pair broke an important resistance around the 108.70 level. It looks like the pair is eyeing a test of 109.00 level moving ahead.

London Session Recap

There was an important release during the London session i.e. the German IFO business climate index was published by the CESifo Group. There was no relief for the EURUSD pair, as the German IFO business climate index fell from 106.3 to 104.3 in September 2014, compared to the previous month. The most important point which we need to note is the fact that this was the lowest IFO business climate index in the last 12 months. Moreover, not only the IFO business climate index fell, but the German IFO current assessment and expectations also fell this time. The German current assessment fell from 111.1 to 110.5 and Expectation dived from 101.7 to 99.3. So, overall the outcome was discouraging and the Euro sellers got one more reason to take the EURUSD pair lower.      

Moreover, the Italian trade balance was also released during the London session by the National Institute of Statistics. According to the report, Italy's foreign trade with non-EU countries showed a surplus of 1,727B euros, compared to the previous reading of 2.150B euros.                           

The EURUSD pair traded lower during the London session after trading as high as 1.2863. 

Oliver Miller

Oliver Miller

"Patience is the key for success"

Oliver Miller is one of the best financial analyst with 18 years of online trading experience

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