Forex Minute Trade Plan – Fundamental Insights 22/04/2014

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As the markets return to normality after the Easter break, a number of key fundamental releases look set to dominate sentiment. Here’s what you need to know.

US Existing Home Sales

First up is the US existing home sales data for March. The figure reports the change in the annualized number of existing homes sold during the previous month. With Janet Yellen to-ing and fro-ing somewhat over the likelihood of a potential near term rate rise, traders and investors have turned their focus to US data to gain insight into the potential future of monetary policy in the nation. This means that the major releases have the potential for real market moving impact in the event of a surprise. Home sales are important as they are a leading indicator of consumer confidence, and in turn, economic strength, meaning they can be classed as one of the aforementioned market movers.

Consensus forecasts the figure at 4.55M, a small decline on the previous growth of 4.60M. Look for a higher than expected release to strengthen the USD versus its major counterparts, with the opposite being true for a downside miss.

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Australian Consumer Price Index (CPI) (QoQ)

The day’s other headliner is the Australian CPI figure. the figure represents the change in price of a basket of goods and services in Australia, or in other words, inflation. There is some considerable concern in Australia at the moment that the mining sector may contribute to high unemployment, and the Chinese economic slowdown could compound a reduction in output. For these reasons, traders will be watching the latest inflation release to a) gauge the potential of a near term rate hike and b) gain insight into the Australian economic outlook.

Consensus forecasts the release at 0.8%, with no change on the previous release. Look for a higher than expected release to boost the AUDUSD, with the reverse being true for a downside miss.

To contact the reporter of this story: Samuel Rae at Samuel@forexminute.com