US New Home Sales indicator is released monthly, and provides analysts with important data the health and direction of the housing sector. A higher reading than the market prediction is bullish for the dollar.
Here are all the details, and 5 possible outcomes for USD/JPY.
Published on Thursday at 14:00 GMT.
Indicator Background
US New Home Sales provides analysts and investors with a snapshot of the strength of the US housing market, one of the most important sectors of the economy. As a house is likely to be the largest purchase that a consumer will make, this indicator also can provide insight into current levels of consumer spending and confidence.
The May release rose to 546 thousand, easily surpassing the forecast of 524 thousand. The markets are expecting another strong reading in the June report, with a forecast of 543K.
Sentiments and levels
While recent US data has not impressed, such as the fall in retail sales, Yellen’s relatively upbeat comments helped USD/JPY push higher last week. US unemployment claims looked sharp this week, which could give the dollar some momentum. So, the overall sentiment is bearish on USD/JPY towards this release.
Technical levels, from top to bottom: 126.59, 125.86, 124.16, 123.18, 122.01 and 121.39.
5 Scenarios
- Within expectations: 540K to 546K: In such a case, USD/JPY is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 547K to 550K: An unexpected higher reading can send USD/JPY above one resistance level.
- Well above expectations: Above 550K: A sharp increase could propel the pair above a second resistance line.
- Below expectations: 536K to 539K: A reading lower than forecast could send USD/JPY below one support level.
- Well below expectations: Below 536K. In this outcome, the pair could break past a second support level.
For more on the yen, see the USD/JPY forecast.
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