Feds Bullard could adjust QE

• Would adjust QE program meeting by meeting
• Economic prospects better than November
• Oil prices significant for US consumers
• Job moves are slow and deliberate but expects unemployment to decline slowly

Economic Statistics: US Home Sales fall to 284K

The Month supply rise to 7.9 months from 7.0 month last month.

Median New Home Price $230,600 This is up 5.7% from a year ago.
By regions:
Northeast 34,000 vs 22,000
Midwest 41,000 vs 35,000
SOuth 143,000 vs 164,000
West 66,000 vs 104,000

Overall, a weaker report but if I were to rank importance at this point in the cycle the Existing Home sales is more important. With an overhang of supply still prevalent in the market, New Home construction is not the smart place to see advances. Builders and buyers realize this. So a substantial move higher is not really expected.

The NY Morning Forex Commentary for Feb 24th

US New Home Sales Data due at 10AM

GBPUSD moves above 100 hour MA at 1.6200 but has resistance above

The GBPUSD has been bouncing between the 100 and 200 hour MA at the 1.6150 area and the 1.6200 level. The pair is breaking above the 100 hour MA at the 1.6200 level now and the market will now look for continued buying momentum.  The  high over the last eight hours of trading comes in at 1.6213 and a move above this level should lead to further upside momentum.  A failure on the break would likely lead to a rotation back to the downside.

Looking at the 5 minute chart, the GBPUSD has resistance at the 200 bar MA at the 1.6206 level as well.  This area is therefore a tough level.   There could be profit taking sellers all the way up to the 1.6213 level.

Gold moves higher as Mideast tension continues to dominate

Gold has moved higher again today, but the range is fairly narrow suggesting perhaps a better balance of buyers and sellers. With Saudi Arabia talking about increasing oil production, there is less an upward bias.  Nevertheless, the tension in the Middle East and oil prices still at the $100 a barrel price level, the safe haven trade seems to be continue to be in full swing.

Of course the technicals, will give the clues about the fundamentals. So outlining the important levels is important. The price yesterday moved above the shallow trendline that defined the top earlier in the  week (see daily chart above). The low today dipped just below the trendline support $1409.67 level. This level will be a key borderline to watch on the downside today. From the daily chart, the next key topside target would extend up to the $1424 level where the November 2010 high comes in along with the 2011 high (1st trading day of the year).

Off the hourly chart, there is topside trendline that comes in at the 1419.40 level currently. This is a closer target for the pair today and becomes the next target that has to be breached. On the downside, the high from yesterday at the $1410.95 level will be another support level.  If this level and the $1409.67 level (from the daily chart) are breached, some further profit taking can be expected. Until then,however, the bias is still to the upside for the pair.

Durables good and bad, and Initial Claims better

Durable Goods headline number was as expected with a 2.7% gain (vs 2.8%) but the numbers are showing that ex Transportation fell by a much larger than expected -3.6% +0.5%. The decline however, was not as bad given the sharp revision in the previous month. That showed a revised 3% gain versus an initial gain of 0.5% so overall, there was good and bad in the report.

The Initial Claims fell to 391K from a revised 413K (revised from 410K). Any improvement in jobs is good for the economy and should be good for the dollar. USDJPY is up a little on the news but the trend continues.

Jobless Claims Outlook Positive, Durable Goods as Expected with Ex Transport Lower

Jobless Claims:  Survey:  405K    Actual: 391K   Prior: 410K    Revised:  413K   

Continuing Claims:  Survey: 3880K    Actual: 3790K    Prior: 3911K  Revised 3935K

Durable Goods Orders:   Survey: 2.8%      Actual: 2.7%   Prior:  -2.5%   

Durables Ex Transportation:   Survey:  0.5%      Actual: -3.6%     Prior:  0.5%   

Cap Goods Orders Nondef Ex Air:   Survey:  -1.0%     Actual:  -6.9%    Prior:  1.4%     Revised: 4.3%

Cap Goods Ship Nondef Ex Air:    Actual:  -2.0%    Prior:  1.7%     

Chicago Fed Nat Activity Index:  Survey:  0.09%     Actual:  -.16%    Prior:  0.03%     Revised: %