US Pending Home Sales indicator is released monthly, and provides analysts with a snapshot of the health 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 Thursday at 14:00 GMT.
Indicator Background
Pending Homes Sales is a key release that can impact on the movement of USD/JPY. As a house is likely to be the largest purchase that a consumer will make, this indicator provides an important gauge of consumer confidence and spending.
The July release was sluggish, posting a decline of -1.3%. This was the indicator’s performance in 2013 and well off the estimate of a 0.2% gain. The markets are expecting another decline in August, with the estimate standing at -0.9%.
Sentiments and levels
USD/JPY was quite volatile last week, as the US dollar dropped sharply against the yen but then recovered these losses. US releases looked sharp last week, and the improving US economy bodes well for the dollar. At the same time, the Japanese economy has been picking up steam, and if this week’s inflation numbers are strong, the yen could gain ground. So, the overall sentiment is neutral on USD/JPY towards this release.
Technical levels, from top to bottom: 100.85, 100, 98.90, 97.80, 96.71 and 95.
5 Scenarios
- Within expectations: -1.1% to -0.7%: In such a case, USD/JPY is likely to rise within range, with a small chance of breaking higher.
- Above expectations: -0.6% to -0.2%: An unexpected higher reading can send USD/JPY above one resistance level.
- Well above expectations: Above -0.2%: A sharp increase could propel the pair above a second resistance line.
- Below expectations: -1.6% to -1.2%: A reading lower than forecast could send USD/JPY below one support level.
- Well below expectations: Below -1.6%: In this outcome, the pair would likely break two or more support levels.
For more on the yen, see the USD/JPY.
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