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EUR/USD Signal - U.S. Existing home sales - 22 Mar 2017

Signal details
Entry Price: 
1.0750
Close Price: 
No trade
Direction: 
Low
Expiry Time: 
21:00 GMT
How we trade
5/5 of 4 ratings

U.S. existing home sales figures will be coming out later today and the data is likely to bring some volatility to the EURUSD in an otherwise quiet day of trading. The EURUSD has been posting strong gains since last week, however the rally is showing signs of exhaustion and could potentially see some downside in the common currency in the near term ahead of the existing home sales data and the U.S. Fed Chair Janet Yellen's speech later this week.

The U.S. existing home sales data is forecast to show 5.59 million for the month of February. This follows a 5.69 million headline print in January. It was also the fastest pace of increase since a decade, data from the National Association of Realtors (NAR) showed last month. The total existing home sales which includes completed transactions for single-family homes, town homes, condominiums expanded at a pace of 3.3% on a seasonally adjusted basis.

In the month before, in December, existing home sales grew at a revised pace of 5.51 million. The pace of increase in January compared to a year ago was at the rate of 3.8%. The markets cheered the strong print and the NAR's Chief Economist Lawrence Yun said that the gains in January were the most resilient even as consumers braced for higher interest rates.

The data coming out today will be critical for the U.S. dollar which has taken a hit since this week as investors started to scale back their bets for the Trump trade on prolonged delays to the tax reforms and infrastructure spending proposals. Therefore, a better than expected print in existing home sales could reinforce the U.S. dollar's strength in the short term.

The price action in EURUSD has seen a strong rally towards 1.0800 and on the 4-hour chart, we can notice that EURUSD is consolidating into a rising wedge pattern. Following a short term retest to 1.0750, we expect some downside in prices. Watch out for pullback in price towards 1.0750 - 1.0800. Thus, purchasing daily PUT options in EURUSD at 1.0750 for an end of day expiry is the ideal binary options trading signal for the day.

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.