How to Trade the US Pending Home Sales: A Comprehensive Guide


The US Pending Home Sales report provides crucial insights into the housing market and consumer behavior in the United States. This guide will share the exact strategy that professional traders use to profit from market movements. By following our step-by-step guide, you’ll learn how to level the playing field and effectively trade the US Pending Home Sales report.

Understanding the US Pending Home Sales Report

The Pending Home Sales report, released monthly by the National Association of Realtors (NAR), measures the change in the number of homes under contract to be sold but still awaiting the closing transaction. It is a leading indicator of housing market activity and future home sales.

Why the US Pending Home Sales Report Matters

Why the US Pending Home Sales Report Often Won’t Move the Market

Trading Strategy for US Pending Home Sales

Step 1: Analyze Federal Reserve Priorities

The first step is to understand what data points the Federal Reserve is currently focused on. If the Fed is focused on housing market data, then the Pending Home Sales report will have a significant amount of volatility because the Fed is in some way basing its interest rate decisions on that data release. To quickly determine the Fed’s current focus, you can use our Professional Economic Calendar, which includes a fundamental guide. This resource helps traders stay updated on the data points that matter most to the Fed, providing a strategic advantage.

Step 2: Use High-Low Expectation Forecasts

Professional traders rely on high-low forecasts to gauge market expectations accurately. Here’s a more detailed look at why these forecasts are crucial:

Understanding High-Low Forecasts

Economic forecasts are derived from surveys of credible institutions, each providing their best estimate on upcoming data points. Retail calendars typically present the median of these estimates, which can be misleading. The median forecast doesn’t reveal the full range of expectations and, therefore, doesn’t indicate how surprising an actual data release is compared to the extremes of analysts’ projections. In contrast, professional economic calendars include both high and low estimates. This additional information shows the analysts’ expectations at the extreme ends of their projections. Great trading opportunities arise when data releases fall outside these high and low estimates, creating market shocks that move prices significantly.

Step 3 - Choosing the Most Volatile Instrument to Trade

Using insights from institutional reports, traders can select the most responsive currency pairs. For example, if USD/JPY is particularly sensitive to economic data as outlined by the City Economic Surprise Index and the US Pending Home Sales report shows a significant deviation, this pair could be an ideal target for trading.

Trade Execution Steps

  1. Confirm Fed Focus: Ensure the Federal Reserve is currently emphasizing housing market data. If the housing market is a primary focus, the US Pending Home Sales report will have a higher likelihood of moving the market. Remember, if the central bank is focused on the data point, it’s because they are using that data point to make a decision on rates. This is the reason data points that are focused on cause volatility.
  2. Check Forecast Ranges: Before the data release, review the high and low forecast expectations for the event. Plan to trade only if the actual data significantly exceeds the high estimate or falls below the low estimate. This strategy ensures you act on genuinely surprising data and there will most likely be a follow-through reaction.
  3. Monitor Revisions: Check for any conflicting revisions in the data, as these can alter the initial market reaction. Make sure the primary release and any revisions align to support your trade.
  4. Enter Trade Promptly: Once you confirm the deviation, act quickly to enter your trade. Enter within the first 30 seconds. Speed is crucial, as market reactions to significant data surprises happen rapidly.
  5. Set Stop and Take Profit:
    • Stop-Loss: Place your stop-loss below the low of the initial spike candle to protect against adverse movements.
    • Take Profit: Aim for 15-30 pips for tier two events like the US Pending Home Sales report, adjusting based on market conditions and volatility.

Managing the Trade

Managing the Trade


While the US Pending Home Sales report may not always lead to significant market movements, understanding its nuances and using a professional trading strategy can help you capitalize on unexpected deviations. If you don’t have the tools mentioned above, try out our Professional Economic Calendar Package and use institutional tools to level the playing field. By following these steps, you’ll be well-prepared to trade the US Pending Home Sales report effectively, leveraging the same strategies that professional traders use to profit from this economic data release.

Uncover Macro-Fundamental Trading Opportunities

Join 30,000 macro-fundamental traders and get our week ahead video sent straight to your inbox.

Uncover FX trading opportunities

Join 30,000 macro-fundamental traders and get actionable trade ideas and price-move explainers straight to your inbox every week.