US existing home sales beat expectations with an annualized level of 5.6 million units in October, slightly above 5.44 million expected. The previous number was marginally revised to the upside: 5.49 against 5.47 predicted. This is a rise 2%.
Getting good news is great, but the margin of the beat and importance of the figure do not imply a significant reaction. There are more important figures out there. However, after the US dollar took another breather, it is now resuming its rally.
The dollars rally is powered by Trump’s Triumph. Markets see fiscal stimulus that will result in higher inflation and higher interest rates. However, we still do not know what Trump will actually do and what his fellow Republicans will approve.
Here is the reaction in EUR/USD. The world’s most popular currency pair advanced managed to recover above 1.0650 but the gains were gradually eroded. This small piece of positive US news serves as a pretext for a stronger move to the upside for the greenback, a bigger drop in euro/dollar.
The cycle lows are around 1.0570. More significant support awaits at 1.0520, the December 2015 low. The last line is 1.0460, the 13 year low.
