Usd/jpy drops as us housing data indicates mixed signals

USDJPY Analysis

Performance after Tuesday
Period	Pct	Chg	Momentum
Tuesday	-0.74%	-114 Pips
Week to-date	-0.71%	-108.7 Pips
November	0.71%	107.9 Pips

Upcoming key events (London Time)

Wed 01:30 PM USD PCE Price Index, excluding food and energy (12-mth)
Wed 01:30 PM USD GDP annual rate

What happened lately

In the United States, the housing market witnessed a downturn in October, as evidenced by the decrease in New-Home Sales Change from the previously revised figure of 7%. On the other hand, the U.S. House Price Index exhibited an upward trend, increasing to 0.7% in September. This is a notable rise from the revised 0.4% figure in August, which was initially reported as 0.3%. The Federal Housing Finance Agency (FHFA) provided these insights, reflecting the dynamics within the housing sector where prices are nudging upwards while sales are facing a decline. This divergence indicates potential constraints in the affordability or availability of new homes despite rising values, portraying mixed signals regarding consumer confidence and housing demand.

The effect on the USDJPY pair from these economic releases and the broader context results in a dynamic interplay. The USDJPY dropped by -0.74% to a value of 153.06, reflecting market reactions to the data and possibly anticipated changes in future U.S. economic policies. The upcoming data releases, which include high-impact reports such as the USD Personal Consumption Expenditures (PCE) Price Index and the GDP annual rate, are poised to significantly affect USD valuation. If the GDP report signals stronger economic performance or if the PCE Price Index underscores rising inflationary pressures, it could prompt expectations of monetary tightening, strengthening the USD and potentially reversing the decline against the JPY. Conversely, weaker-than-expected figures might continue the bearish pressure on the USDJPY pair. As investors stay alert to economic indicators, these upcoming announcements will play a critical role in shaping the trajectory of USDJPY movements.

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What can we expect from USDJPY today?

USDJPY on Tuesday dropped -0.74% to 153.06. Price is below 9-Day EMA while Stochastic is falling.

Updated daily direction for USDJPY looks bearish as the pair posted lower in Tuesday trading session.

Looking ahead for the day, immediate support level is at 152.55 (S1) with break below could see further selling pressure towards 152.04 (S2). To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 154.44 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 152.98 would indicate selling pressure.

For the week to-date, take note that USDJPY is bearish as the pair posted lower by -0.71%.

Key levels to watch out: