The US economy is scheduled to release its pending home sales data in today’s New York trading session. For the month of February, only a mere 0.1% uptick is expected to follow the previous month’s 0.1% increase. This would signify a downturn in the US housing market, especially if the actual figure comes in short of expectations.
Bear in mind that this report has been churning out weaker than expected results for the past seven months, with five of those showing declines. Another weaker than expected release could push the dollar lower against its counterparts, which might be enough to give EUR/USD a boost.
Take note though that this pair has been unable to take advantage of the wave of dollar weakness than ensued yesterday, as the euro zone economy has shown its share of weak spots as well. Earlier this week, there have been talks of negative deposit rates from the ECB, as central bank policymakers are looking at various options to keep the euro’s rallies at bay and to ward of deflationary pressures.
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A quick look at the previous pending home sales release back in February 28 shows that the US dollar sold off during the actual release, consolidated, then resumed its selloff in the coming days. Of course this was brought forth by other economic reports from the US and euro zone, as well as changes in market sentiment, but there’s no denying that the weak data contributed to the dollar’s decline.
On the other hand, a strong rebound in pending home sales could trigger a downside break for EUR/USD. After all, the pair has recently broken below a rising trend line on a shorter-term time frame, which is an early hint that a downtrend might be in the cards.
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