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USD/JPY binary signal - U.S. New home sales - 23 June 2017

Signal details
Entry Price: 
111.35
Close Price: 
111.25
Direction: 
Low
Expiry Time: 
20:00 GMT
Result: 
ITM
How we trade
5/5 of 4 ratings

The U.S. new home sales data will be released today at 1345 GMT. According to the economists polled, new home sales numbers are expected to show an increase of 599k in May. This is slightly higher than April's disappointing headline print of 569k.

In March, the new home sales data rose to the strongest levels in nearly 10-years. Marking 10-year high, new home sales has eased back since then. Another weak price could potentially mark a second month of declines in the new home sales data. In March, new home sales rose 642k, the highest since October 2007.

Following the strong numbers, April's data was 11.4% lower on a month over month basis, making it 0.5% higher on a year over year basis. Given the fact that the data is based on a very small sample, the new home sales report is often subject to large revisions. Therefore, today's data release will also see any significant revisions to April's data.

The April new home sales figures were also dented by the fact that it was rainy and as a result, the numbers came out weak according to some experts. Without reading too much into one month's data, today's report could be important as continued weakness could potentially see the markets adjust their rate hike expectations from the Fed.

The FOMC has signaled one more rate hike this year and also noted that it will unwind its balance sheet which stands at approximately $4.3 trillion dollars. This amount was accumulated during the Fed's QE purchases. Unwinding of the balance sheet is seen to be a form of policy tightening. Fed officials have maintained that they will start with unwinding the balance sheet as early as September or October.

The U.S. dollar continues to remain range bound as a result. Based on the above factors, today's binary options signal recommendation is USDJPY. The currency pair is seen currently trending weaker and we expect some near term downside.

Therefore, we would purchase PUT options in USDJPY at 111.35 for a 20:00 GMT expiry time as we expect to see the currency pair close lower on the day.

binary options signal usdjpy 23 Jun 2017

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.