According to Zillow Real Estate Report for the last quarter, homes are selling more quickly in 27 of the 35 metro states in the US than this time last year. This is good news, despite the construction activity showing some signs of slow down. Last week we saw the existing home sales release printing a nine year highs and now we have the new home sales growing at a seasonally adjusted 592K homes for the month of June with the number of days the property being in the market reducing to a median 78 days. With yesterday reading, it pushed the new home sales data reading to the second highest reading after the 2008 credit crisis. Also released yesterday was the CB consumer confidence which only confirmed that Brexit worries and its impact on the economy was fading, it printed 97.3 from the expected 95.6 further showing how consumers in general was confident on the general economic outlook.
Focus today will be on the FOMC meeting at 1800 GMT, which is the first one after Brexit vote. Investors and economists alike are expecting the Fed to move away from the cautious stance synonymous with the previous policy meeting given the fact that recent economic data shows signs of return to robust growth in the economy. We shall be however looking at the charts today for signs of trend reversals and a bullish dollar. Als0 watch out for Core Durable goods set to be released at 1230 GMT with expectations at 0.3% growth after June’s dip of -0.3%.
To the daily charts, and that triple bottom with a common support at the monthly 50% Fibonacci retracement level is set to remain strong. We anticipate price to break above the 50% yearly retracement level upwards towards this year’s highs at 0.73. Any break below the 38.2 monthly Fibonacci level at 0.693 will invalidate our long positions. As we can see, the stochastics are already indicating a buy signal and a bullish momentum is due in the next coming days.
Our strategy for today will be as follows and we enter our trades in the 15 Min charts:
Buy Limit: 0.7-0.701 (or anywhere between yesterday’s 23.6 Fibonacci level and monthly 50% Fibonacci level)
Have a wonderful trading day.