The U.S. Existing Home Sales index is an economic indicator that shows the number of already established and existing homes being sold from one owner to another.
It is a very important indicator since it reflects the health of the US economy through the sales of those homes.
When more people buy homes simply means that more people are capable of making these big fiscal decisions, which shows the strength of the real estate sector and the overall economy.
On the other hand, when the U.S. exisiting home sales drop, it probably means that not as many people are able to afford buying houses or at least the real estate market hasn’t been very attractive.
Thus when the U.S. Existing Home Sales rise, it is considered as a bullish signal for the US economy and thus bullish for the US dollar. Vise versa, when those sales drop, it is a bearish signal for the economy and the US dollar.