US Pending Home Sales is released monthly, and provides analysts with a snapshot of the health and direction of the US housing sector. A higher reading than the forecast 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
US Pending Homes Sales is an important gauge of the strength of the US housing market, one of the most important sectors in the economy. As a house is likely to be the largest purchase that a consumer will make, home sales are a critical component for economic growth.
Pending Home Sales looked sharp in the February release, jumping 4.5%. This easily beat the forecast of 0.7%. However, the forecast for March does not look good, with the markets anticipating a 0.3%. decline. Will the indicator beat the gloomy forecast?
Sentiments and levels
Incoming BOJ Governor Kuroda has reiterated his inflation of 2% target, but has not provided any specifics about new monetary measures. It seems that the next big move for the yen will come on Kuroda’s first BOJ rate meeting on April 4th. We could see some range trading until then, but any big news from Europe could still rock the pair. So, the overall sentiment is neutral on USD/JPY towards this release.
Technical levels, from top to bottom: 96.71, 95.88, 94.46, 94.40 and 93.84.
5 Scenarios
- Within expectations: -0.5% to -0.1%: In such a case, USD/JPY is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.0% to 0.3%: A reading at zero or in positive territory can send USD/JPY above one resistance line.
- Well above expectations: Above 0.3%: A sharp increase could propel the pair above two or more resistance lines.
- Below expectations: -0.9% to -0.6%: A weak reading could send USD/JPY below one support level.
- Well below expectations: Below -0.9%. A release deep in negative territory, could result in the pair breaking below two or more support levels.
For more on the yen, see the USD/JPY forecast.
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