Daily Briefing, April 23 – Economic Events & Trade Setups on Tuesday
Arslan Butt • 2 min read
Welcome back from Easter Holidays. I hope everyone had an excellent time with family and friends. Now it’s time to get back on track as the market is likely to resume trading at the same pace as before the Easter holidays.
On the economic docket, we have some economic events, although low impact, which will be closely monitored by the market. So, in this update, I’m going to shed some light on these economic events along with a couple of trade setups that are worth watching today.
Key Economic Events
Canadian – Wholesale Sales m/m
Today at 12:30 GMT, Statistics Canada will be reporting a change in the total value of sales at the wholesale level. Considering a surge in crude oil prices, this figure should be positive, shouldn’t it?
Well not really, since the figure comes out 50 days after the month’s end, this current wholesale figure belongs to February and at that point of time oil prices were slightly lower than the current market price of $65.9725. Thus, we should be ready to capture a drop in the wholesales. Economists are also expecting a rise of 0.1% in retail sales which is well below 0.6% figure previously.
Eurozone – Consumer Confidence
The Eurostat is due to release this economic data at 14:00 GMT with a forecast of -7. The benchmark for this figure is 0. The data above 0 indicates optimization, below indicate pessimism. Considering the drop in GDP, PMI figures and surge in debt to GDP ratios, the investor confidence has deteriorated. So it won’t be surprising to expect a dip in the consumer confidence today.
USD – New Home Sales
The Census Bureau is due to release the new home sales data at 14:00 GMT with a slightly NEGATIVE forecast of 647K vs. 667K beforehand.
Why New Homes Sales Matter?
Traders, it’s a leading indicator of economic health because the sale of a new home triggers a wide-reaching ripple effect. For instance, furniture and appliances are purchased for the house, the financing bank sells a mortgage, and brokers are paid to execute the transaction. So, better than expected data is considered suitable for the economy and underpins the currency. In our case, the data is slightly negative and may place bearish pressure on the US dollar.
EUR/USD – Fibonacci Retracement Plays
The US dollar mostly drives the movement in the EUR/USD. The Greenback surged against a basket of key rivals on Tuesday, while the single currency Euro remained under pressure due to a series of a disappointing round of PMI updates from Europe.
The direct currency pair is now facing support of around $1.1240 and has already completed 38.2% retracement at 1.1256. Right now, the pair might face immediate resistance at $1.1265 (50% Fibo levels) along with support around $ 1.1220.
EUR/USD – Technical Levels
Key Trading Level: 1.1253
EUR/USD – Trade Plan
The idea is to stay bearish below $1.1260 with a stop loss above $1.1280 and take profit at $1.1220.