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 Thursday at 14:00 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.

In January, the indicator jumped to 555 thousand, but this was short of the estimate of 575 thousand. The upward movement is expected to continue, with an estimate of 566 thousand. Will the indicator beat the estimate in February?

Sentiments and levels

The Fed raised rates last week but the rate statement was more dovish than the markets would have liked. Still, the US economy is performing well and employment and consumer confidence numbers remain strong. So, the overall sentiment is neutral on USD/JPY towards this release.

Technical levels, from top to bottom: 115.90, 114.63, 112.53, 110.73 and 109.18

5 Scenarios

  • Within expectations: 562K to 570K: In such a case, USD/JPY is likely to rise within range, with a small chance of breaking higher.
  • Above expectations: 571K to 575K: An unexpected higher reading can send USD/JPY above one resistance level.
  • Well above expectations: Above 575K: A sharp increase could propel the pair above a second resistance line.
  • Below expectations: 557K to 561K: A reading lower than forecast could send USD/JPY below one support level.
  • Well below expectations: Below 557K. In this outcome, the pair could break below a second support level.
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