Monday, 25 Jan 2010

USD Rising Prior to Existing Home Sales Figure

The start of this week saw few impacting market movements. Australia's absence from today's market in observance of Australia Day had little effect, and other markets seem to be remaining calm on this quiet news day. The EUR/USD is still floating in an upward trending range, with the GBP/USD mirroring the movement, but in a downward trending range.

The US Dollar, however, has surged ahead against a few currencies over the past few hours. Against the EUR, the USD had dropped to 1.4193, but since 12:00 GMT has begun to ascend towards 1.4120. Similar movements have occurred against the Swiss Franc, as well as the Canadian Dollar (CAD) in the last few hours.

An expectation is beginning to be priced in for a rise in US Existing Home Sales. If the report expected at 15:00 GMT fails to meet expectations then this present movement in the greenback may rapidly reverse course.

A possible contradiction to this assessment has also reared its head lately with the USD dropping after a negative release. This typically occurs during abnormal market conditions when risk aversion is running rampant. Traders should be aware of this condition and attempt to anticipate price movements based on today's major release at 15:00 GMT, especially since this is the only impacting event of the day.