US homebuilding activity dropped in April; however, revisions of the preceding month's readings suggested that homebuilding activity continued improving. The Census Bureau reported on Tuesday that housing starts declined 2.6% to a seasonally adjusted annual pace of 1.17M units last month, following March's upwardly revised 1.28M-unit pace and falling behind expectations for a 3.7% rise to a 1.26M-unit pace. Analysts suggested that a slowdown in homebuilding activity had been driven by unusually rainy weather in California. On an annual basis, housing starts were up 10.5% compared to the same period a year ago.
Meanwhile, building permits fell 2.5% to a seasonally adjusted pace of 1.23M units, whereas analysts anticipated a slight climb of 0.2% to a 1.27M-unit pace in April. With building permits higher than housing starts, homebuilding activity is set to rebound in the upcoming months. Later in the day, the Federal Reserve reported that industrial production in the United States rose 1.0% in April, the largest gain since February 2014, while analysts expected industrial output to climb just 0.4%.
Japanese GDP
USD/JPY slumps on safe-haven demand
As was anticipated, the USD/JPY currency pair found support near 112.90 yesterday, where the monthly R1 and the 100-day SMA rest. The Buck remains under pressure today as well, which suggests a close is likely to occur below this demand area, paving the way towards a drop to the 112.00 major level. Support around that area is expected to be sufficient to limit the intraday losses, even though technical studies are unable to confirm this scenario. Furthermore, there are no solid market movers present today and with demand for the safe-haven currency higher, no other factor should cause a sudden recovery.Daily chart
Bears keep pushing further, with 66% of all open positions being short now. Meanwhile, the portion of orders to acquire the US Dollar lost three percentage points over the day, having fallen to a total of 49%.
Right now 48% of OANDA clients are bulls, losing one percentage point from before, first time the sentiment turned bearish in a long time, even though just a little. In the meantime, Saxo Bank clients manage to retain a neutral outlook towards the US Dollar, being that 54% of their open positions are now short and the remaining 46% are short.
Spreads (avg, pip) / Trading volume / Volatility
Traders are becoming increasingly bullish on the Dollar