NEWS / Foreign Exchange

The dollar fell across the board after release the report of US new home sales

Dollar Fell on New Home Sales

The dollar fell across the board after a government report showed US new home sales dropped from an annual rate of 985K to 848K in February, the lowest rate since June 2000. This is an unusual big drop in housing sales during spring buying season. The currency weakened to above 1.33 and 1.97 against the euro and the sterling respectively.

Recall that an upbeat existing home sales report gave the dollar a boost on Friday. The weaker-than expected housing data released today reignited worries about the slowing US housing market, raising expectations for a Fed rate cut later this year.

Gains in the euro may be limited ahead of Germany March IFO survey which is forecasted to report a down turn in economic expectations.

The market will focus on the Federal Reserves Chairman Ben Bernanke??™s testimony in front of Congress this Wednesday.

GBPUSD encounters interim resistance at 1.97, backed by 1.9720, and 1.9750. Subsequent ceilings will emerge at 1.9780, followed by 1.98 and 1.9830. On the downside, support begins at 1.9670, followed by 1.9650 and 1.9630. Additional floors are eyed at 1.96, backed by 1.9570 and 1.9550.

EURUSD will face interim resistance at 1.3350, followed by 1.3380 and 1.34. Additional ceilings will emerge at 1.3420, backed by 1.3450. Support starts at 1.33, backed by 1.3280, 1.3250 and 1.3230. Subsequent floors are eyed at 1.32.

Yen In Consolidation