US Pending Home Sales indicator is released monthly, and provides analysts with important data on the health and direction of the housing sector. The December reading is being released just one day after US New Home Sales. A higher reading than the market forecast is bullish for the dollar.
Here are all the details, and 5 possible outcomes for USD/JPY.
Published on Friday at 15:00 GMT.
Indicator Background
US Pending 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 is used to measure US consumer spending and confidence.
The November reading jumped 5.2%, crushing the estimate of a 0.9% gain. However, the forecast for the upcoming release calls for a decline of 0.3%. Will the indicator surprise the markets with another gain this month?
Sentiments and levels
The new Japanese government, which takes office this week, is expected to push for further monetary easing, thus adding more pressure on the yen. In the US, the markets remain hopeful that the recent blame game will not preclude some agreement being reached. . A deal would weaken the yen. So, the overall sentiment is bullish on USD/JPY towards this release.
Technical levels, from top to bottom: 86.97, 86.27, 85.50, 84.20, 83.34 and 82.87.
5 Scenarios
- Within expectations:-0.6% to 0.0%: In such a case, USD/JPY is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.1% to 0.4%: An unexpected higher reading can send USD/JPY above one resistance level.
- Well above expectations: Above 0.4%: A sharp increase could propel the pair above a second resistance line.
- Below expectations: -1.0% to -0.7%: A reading lower than forecast could send USD/JPY below one support level.
- Well below expectations: Below -1.0%. If the reading is deep into negative territory, the pair could drop below a second support level.
For more on the yen, see the USD/JPY forecast.
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