US Home Prices Lower

Standard & Poor's (S&P)/Case–Shiller Home Price Indices registered  new post-crisis lows in its three major composites for the United States (US) over the first quarter of 2012. The national composite lowered 2.0% from the quarter before and 1.9% from the year before. Additionally, the 10- and 20-City indexes registered respective annual returns of -2.8% and -2.6% in the March 2012 quarter.

“While there has been improvement in some regions, housing prices have not turned,” stated David Blitzer, Chairman of the Index Committee at S&P Indices. “This month’s report saw all three composites and five cities hit new lows. However, with last month’s report nine cities hit new lows. Further, about half as many cities, seven, experienced falling prices this month compared to 16 last time. The 10- and 20-City Composite mimic these results; also down about 35% from their relative peaks and hit new lows.”

In other news, US consumer confidence lowered slightly in May to 64.9 from 68.7 in April, according to The Conference Board data on Tuesday. Moreover, the Present Situation Index dropped 4.3 points to 45.9 in May while the Expectations Index declined from 80.4 in April to 77.6 in May. Lynn Franco, Director of Economic Indicators at The Conference Board reported, “Consumers were less positive about current business and labor market conditions, and they were more pessimistic about the short-term outlook. However, consumers were more upbeat about their income prospects, which should help sustain spending. Taken together, the retreat in the Present Situation Index and softening in consumer expectations suggest that the pace of economic growth in the months ahead may moderate."

The EURUSD is testing support near 1.2511 and we expect the support to broken. We expect the next level of support to be established around 1.2400. There will be severe downside pressure on the EURUSD with targets at 1.2245. 

Eugene Ross, Analyst

Admiral Markets

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