The number of homes that went under contract inched higher in October, a sign the housing market could be plateauing in the final months of the year. The National Association of Realtors reported that its pending home sales index, which tracks contract signings for previously owned homes, edged up 0.1% from a downwardly revised September reading to a seasonally adjusted 110.0. Sales typically close within a month or two of signing. It is essential to note that while demand for housing is high, supply still continues to weaken across much of the nation and is well below 2015 levels. While homebuilders ramped up production in October, overall construction is still well below historical norms. Builders cite the high costs of land, labor and regulation as barriers to increased volume.
In addition to that data showed that US crude oil inventories fell unexpectedly last month. In a report, Energy Information Administration said that US crude oil inventories fell to a seasonally adjusted annual rate of -0.884M, from -1.255M in the preceding month.
US Manufacturing PMI and Construction Spending
Today the most impact on the USD/JPY is likely to be from the US Manufacturing PMI, released by both the Markit Economics and the Institute for Supply Management. The PMI captures business conditions in the manufacturing sector. As the manufacturing sector dominates a large part of total GDP, the Manufacturing PMI is an important indicator of business conditions and the overall economic condition in the United States. Some attention could also be paid to the US Construction Spending, as it is an indicator that measures the total amount of spending in the US on all types of construction. The residential construction component is useful for predicting future national new home sales and mortgage origination volume.USD/JPY takes a breath after Wednesday's surge
Amid strong US fundamental figures on Wednesday, the American Dollar gained more than 200 pips against the Japanese Yen, thus, climbed over the 23.60% Fibo level, which caused the pair to exit its ascending channel pattern. The Buck now has a chance to not only retake the 115.00 level, but even the 116.00 mark, despite the weekly R2 and the Bollinger band forming relatively strong resistance there. However, the USD/JPY pair is first required to pierce the weekly R1 at 114.70, which appears to be causing setbacks in the Greenback's bullish trend. As a result, a small corrective decline is possible today, but with the 113.00 mark remaining intact.Daily chart
There are 61% of traders with a negative outlook towards the US Dollar. Meanwhile, 60% of all pending orders are to sell the US Dollar.
Meanwhile, there has been a decrease in the number of long positions at other brokers. Right now 58% of OANDA clients are bears, compared to 55% on Wednesday. In the meantime, Saxo Bank clients also remain slightly on the bearish side, being that the portion of shorts takes up 52% of the market.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish the Dollar