Trading the News: U.S. Existing Home Sales for February

What is Expected
Time of release: 10:00 EDT; 14:00 GMT 3/26/2007
Consensus expectation: 6.35M
Prior reading : 6.46M
Primary Pair Impact : EURUSD

How To Trade This?

As always, the trader should wait 5 minutes post-news event to confirm that price action turns in the direction of the data. For Existing Home Sales, it is very likely that we will see strong reactions on material surprises in the monthly figure. A recent emphasis on mortgage and consumer lending-related woes will shine the spotlight on real estate-linked news.

A short-term uptrend in the EURUSD leaves it just above support at 1.3330, while swing-highs at 1.3400 threaten to slow strong gains. A higher-than-expected Existing Home Sales could force a break through 1.3330. Price extension could challenge a congestion area between 1.3270-1.3300, while a truly sustained move eyes significant support near 1.3200.

A lower-than-forecast Existing Home Sales result could just as likely spark a move to spike-highs near 1.3400. A break may not be sustained, however, as many traders may look to book profits ahead of the Friday close.