Everything went exactly as planned yesterday. The nearly empty macroeconomic calendar, in itself, became a good background for the beginning of a rebound in the dollar, which until then had been steadily growing for several consecutive days. At the end of the day, these successes were consolidated by US statistics on home sales in the secondary market. Honestly, the real estate market was the main topic of yesterday, as it began with information that the level of overdue mortgages in the United States was already equal to the record high that was achieved in 2011. And in truth, such news should be terrifying, since the record high level of delinquencies in mortgages was then a consequence of the 2008 crisis. It took about three years to achieve. A few months were enough for everything
At the same time, data on home sales in the secondary market were even worse than forecasts, and instead of a 2.0% decline, we saw a drop of as much as 9.7%. In absolute numbers, sales fell from 4,330,000 homes to 3,910,000 homes. Sales have been declining for three months already, and during that time they have decreased by almost a third.
Secondary Home Sales (United States):
Of course, today I want to pay attention to preliminary data on business activity indices, but most likely, they will not have any effect. For the simple reason that the growth of all indices is projected both in Europe and in the United States. And almost certainly, these forecasts will come true, as around the world they confidently remove the restrictions imposed due to the coronavirus epidemic. So the business has reason for optimism. And if growth is expected everywhere, then these data will offset each other, and it will be difficult for investors to give preference to one or another currency. So it is possible that the US real estate market will determine investor sentiment today. After all, data on home sales in the secondary market was published yesterday, then the primary could be released today. At the same time, the sales volume of new homes, it seems, should grow by 2.5%. From 623,000 to 635,000. Of course, if this forecast is confirmed, then the dollar will receive a reason for growth. However, given the results of home sales in the secondary market, as well as the situation with overdue mortgages, it is likely that there will be a decline instead of growth. But in this case, the dollar will already be forced to continue its decline against the single European currency.
New Home Sales (United States):
From the point of view of technical analysis, we see an upward turn from the range of 1.1180, which returned the quote to the area of 1.1250/1.1280, where a slight stagnation formed. The current fluctuation is the structure of the recovery process from June 11, where a violation of the local act can occur if the price is consolidated higher than 1.1350.
Regarding volatility, there are high indicators on a daily basis, which indicates the prevailing speculative interest in the market.
In terms of a general review of the trading chart, the daily period, it is worth highlighting that the area where trading forces interact at 1.1440/1.1500 is the main point of resistance in the current measure.
We can assume a temporary price fluctuation within the limits of the deceleration of 1.1250/1.1280, where if the previously set upward stroke is held, the quote will return to the area of 1.1300/1.1320.
Specifying all of the above into trading signals:
- We consider purchase positions higher than 1.1280, with the prospect of a move to 1.1300-1.1320.
- We consider selling positions as a recovery process lower than 1.1250, with the prospect of a move to 1.1200-1.1180.
From the point of view of a comprehensive indicator analysis, we see that the indicators of technical instruments relative to hourly periods signal a purchase due to an upward spiral of long positions from the level of 1.1180. Daytime periods are still in a downward spiral, signaling a sale.
