FX.co ★ Global macro overview for 26/10/2016

Global macro analysis for 26/10/2016:

Existing home sales in September bounced back after declines in the previous two months, and that might be a sign that today's data release at 02:00 pm GMT on newly built homes is heading for a rebound as well. On the other hand, the market participants expect a slide for the second month in a row with sales edging lower in September to 601,000 units (annualized rate), a three-month low. The demand remains strong, caused by recent solid job gains, accelerating wages and very low mortgage rates, but global investors might take into account, that despite improving activity in September the positive outlook for a gradual increase in home-building will likely drag on Q3 GDP. In conclusion, the near-term prospects for a housing recovery remain elevated, but today's number must beat the expectations to support this view.

Let's now take a look at the EUR/USD technical picture at the 4H time frame before the news are published. The pair has bounced from the support at the level of 1.0855 and broken out above the next technical resistance at the level of 1.0909 (now support). Nevertheless, the rally looks corrective and the bigger time frame view remains bearish. The next resistnace is seen at the level of 1.0963.