Global macro overview for 23/05/2017:
Interesting data from the US house market are scheduled for release at 12:30 pm GMT today. The New Home Sales data are expected to remain almost unchanged at the level of 611k houses which is close to last July's 622k – the highest level since the recession ended. The number of new home sales in recent years still points to a healthy trend and is still expected to bounce back in the second quarter after a weak first quarter. Nevertheless, the possibility of another interest rate hike in June 2017 might cast a shadow on future sales results as the credit (mortgage) costs will increase, so the number of people willing to buy the new home might start to decrease slowly. Interest rates, however, still remain at historically low levels, so there is no evidence yet of a sudden slump in new home sales data.
Let's now take a look at the USD/JPY technical picture on the H4 time frame. After a nosedive to the level of 61%Fibo at 110.50, the market recovered quickly, but there is still no sign of any impulsive rally towards the next technical resistance at the level of 112.06. Instead of that, the price is trading in a narrow range between the levels of 110.85 - 111.72. The momentum indicator is still below the fifty level, so the upside momentum is not that strong yet. The change in trend will come with the level of 112.06 violation, otherwise, a sideways price action is expected.
