Home buyers were out in full force in September; DXY, EUR/USD

Did you buy a house in September? Were you trying to buy your house before rates moved higher? Congratulations if you did! During the month of September, MBA 30-Year Mortgage Rates averaged roughly 3.0475, having moved slightly higher towards the end of the month after the September 22^nd FOMC meeting. As of October 20^th, rates were nearly 18 basis points higher at 3.23. Whatever the reason for the September buying, there were a lot of you!

What are economic indicators?

Last week we saw September’s Existing Home Sales. MoM the print was +7% at 6.29M, the highest level since January. Expectations were for a mild increase of 1.2% to 5.95M. On Tuesday, New Home Sales for September were released. MoM sales were up 14% to 800,000, the highest level since July 2020. Expectations were for a rise of 1% to 760,000.

What is the US Dollar Index (DXY)?

The US Dollar Index (DXY) had been moving aggressively higher since putting in a low of 91.95 on September 3^rd. However, the index failed to break through a long-term trendline dating back to 2011 (red) near 94.55 on October 12^th and pulled back. The DXY has been trading in a range between 93.36 and 94.56 since September 29^th. There is a confluence of resistance above at the October 12^th highs, the long-term upward sloping trendline, and horizontal resistance from the highs of September 2020. These levels converge between 94.55 and 94.76. Support is at the October 26^th lows of 93.48, the 50-Day Moving Average at 93.34 and the 50% retracement from the September 3^rd lows to the October 12^th highs at 93.25.

Source: Tradingview; Stone X

Trade EUR/USD now: Login or Open a new account!

• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore

EUR/USD acts inversely to the DXY. The pair had been moving lower from September 3^rd when it tested previous highs at 1.1908. On September 29^th, EUR/USD broke through horizontal support at 1.1664, setting up a double top formation. The target for a double top is the height of the pattern added to the breakdown point, which is near 1.1410. However, price stalled on the downside after reaching the 161.8% Fibonacci retracement level from the August 20^th lows to the September 3^rd highs, near 1.1525. EUR/USD has been range bound between 1.1525 and 1.1669 since September 29^th (bouncing to the neckline of the double top). Strong resistance is between 1.1669 and 1.1684. Just above is the 200-Day Moving Average at 1.1700. Horizontal support is at 1.1572 and then a confluence of support between the previously mentioned 161.8% Fibonacci extension, horizontal support and the 50% retracement from the March 2020 lows to the January 6^th highs. These levels converge between 1.1490 and 1.1515.

Source: Tradingview; Stone X

Home buyers were out in full force during the month of September buying both existing and new houses. However, rates began moving higher towards the end of the month. Were these people rushing to buy ahead of rising rates? We’ll find out when October’s numbers are released in a month!

Learn more about forex trading opportunities

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.