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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 Wednesday at 15:00 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, a key driver of economic activity.

The indicator improved to 495 thousand in October, but this was short of the estimate of 500 thousand. The upward trend is expected to continue in the November report, with the estimate standing at 507 thousand.

Sentiments and levels

The Fed finally pulled the trigger, but the yen managed to hold its own against the dollar as the BOJ surprised with some adjustments to monetary policy. US Final GDP, a key event, could  have a strong impact on the pair’s movement this week. So, the overall sentiment is neutral on USD/JPY towards this release.

Technical levels, from top to bottom: 124.16, 123, 121.50, 120.40 and 118.55.

5 Scenarios

  1. Within expectations: 502K to 511K: In such a case, USD/JPY is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 512K to 517K: An unexpected higher reading can send USD/JPY above one resistance level.
  3. Well above expectations: Above 517K: A sharp increase could propel the pair above a second resistance line.
  4. Below expectations: 496K to 501K: A reading lower than forecast could send USD/JPY below one support level.
  5. Well below expectations: Below 496K. In this outcome, the pair could break below a second support level.

For more on the yen, see the USD/JPY forecast.

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