Pending home sales increased substantially and, thus, surprised many experts, who did not expect such a leap. In February, the Pending Home Sales Index spiked 5.5% and reached the highest level in almost a year and the second highest level in over a decade. Growth was partially attributable to a record-warm end of winter, which motivated people to start looking for a house more actively than usual. Another factor that boosted sales was households' concern over a possible rise of interest rates by the end of this year. However, the main reason behind increased sales was strong demand, which was driven by improving economic conditions in the US. Yet, many potential home-buyers faced the problem of supply shortages, which negatively impacted prices, especially in the lower- and mid-market price ranges.
Other data released on Wednesday revealed that US crude oil inventories rose 900,000 barrels last week, following the preceding week's gain of 5 million barrels. Meanwhile, analysts anticipated a climb of 1.2 million barrels during the reported week. Oil prices rose shortly after the release, with WTI jumping above $49 per barrel. Data suggests that the OPEC production deal cut has finally started bearing fruits.
US Final GDP is the main event today
Among important fundamental data releases today attention turns to the US Final GDP figure. The GDP shows the monetary value of all the goods, services and structures produced within a country in a given period of time. It is also a gross measure of market activity, because it indicates the pace at which the country's economy is growing or decreasing. Additionally, the Initial Jobless Claims are due, but they are unlikely to have any impact and are expected to be overshadowed by the GDP release. From the Japanese side the Tokyo Core CPI is due. It is a measure of price movements obtained by comparison of the retail prices of a representative shopping basket of goods and services, excluding fresh food. The index captures inflation in Tokyo. The purchase power of JPY is dragged down by inflation. Another important event will be the Industrial Production. It measure output of the Japanese factories and mines. Changes in industrial production are widely followed as a major indicator of strength in the manufacturing sector.USD/JPY in tight range between 110.60 and 111.26
Even though the Greenback weakened against the Yen on Wednesday, no significant losses were registered, with the pair remaining above 111.00. The nearest resistance is still the monthly S1 at 111.26, which is expected to prevent the USD/JPY pair from climbing higher today. Being that there is barely any room for a rally, the bearish development is the most probable outcome. Furthermore, technical indicators also suggest the US Dollar is to edge lower today. Although the nearest support rests at 110.35, namely the weekly S1, the 110.60 level appears to be providing strong psychological support, forming the lower boundary of the pair's consolidation range.Daily chart
Market sentiment remains bullish at 72%, but all pending orders are now equally divided between the buy and the sell ones.
Right now 65% of OANDA clients are bulls, compared to 63% on Wednesday. In the meantime, Saxo Bank clients retain a positive outlook towards the US Dollar, being that 67% of their open positions are now long and the remaining 33% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar