The Existing Home Sales indicator is released monthly, and provides analysts with important data about consumer demand in the housing sector. A reading which is higher than the market prediction is bullish for the dollar.
Here are all the details, and 5 possible outcomes for USD/JPY.
Published on Wednesday at 14:00 GMT.
Indicator Background
The Existing Homes Sales Report 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 helps measure consumer spending and confidence in the US economy.
The February reading for the indicator came in at 4.57M, slightly lower than the market forecast of 4.66M. The market forecast for March calls for a slight improvement, up to 4.61M. These figures are well down from the September 2011 reading of 5.03M, indicating some weakness in the US housing market.
Sentiments and levels
Bernanke’s relatively bullish remarks helped prop up USD/JPY. The pair has clearly gained momentum, and is approaching a one year high. So, the overall sentiment is bullish on USD/JPY towards this release.
Technical levels, from top to bottom: 85.50, 84.50, 84, 83.20, 82.87, 82.20, and 81.60.
5 Scenarios
- Within expectations: 4.53M to 4.68M: In such a case, USD/JPY is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 4.69M to 4.77M: An unexpected higher reading can send USD/JPY above one resistance level.
- Well above expectations: Above 4.77M: A sharp increase could propel the pair above a second resistance line.
- Below expectations: 4.44M to 4.52M: A reading lower than forecast could send USD/JPY below one support level.
- Well below expectations: In this outcome, the pair could break two or more support levels.
For more on the yen, see the USD/JPY forecast.
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