The US Building Permits indicator, released monthly, measures the number of new residential permits issued. It provides analysts with important data about consumer demand as well as activity in the construction 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 Tuesday at 12:30 GMT.
The Building Permits indicator provides analysts and investors with a snapshot of consumer demand and the construction industry, both of which are important engines of economic growth, and catalysts for creating new jobs.
In March, the indicator posted a reading of 0.72M, which was higher than the market forecast of 0.69M. These were the best figures recorded since October 2008. The markets are predicting little change, calling for a reading of 0.71M. Will the indicator again surpass the forecast in April?
Sentiments and levels
Although the Japanese economy is not performing well, the yen continues to be a safe haven currency for investors worried by the global slowdown and the dark clouds hovering over Europe. As well, there is a reasonable likelihood that the BOJ would intervene to protect the yen and prevent it from sliding below the 80 level. So, the overall sentiment has is neutral on USD/JPY towards this release.
Technical levels, from top to bottom: 82.87, 81.80, 81.30, 80.60, 80, 79.50 and 78.30.
- Within expectations: 0.67M to 0.75M: In such a case, USD/JPY is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.76M to 0.80M: An unexpected higher reading can send USD/JPY above one resistance level.
- Well above expectations: Above 0.80M: A sharp increase could propel the pair above a second resistance line.
- Below expectations: 0.62M to 0.66M: A reading lower than forecast could send USD/JPY below one support level.
- Well below expectations: 0.62M. Given the improving US economy, this scenario is unlikely. In this outcome, the pair would could break two or more support levels.
For more on the yen, see the USD/JPY forecast.