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New home sales in the United States reached the highest level in over five years, sending the US Dollar slightly higher against the Japanese Yen.
468 thousand contracts on new homes were signed in January according to the commerce department, beating expectations for only 400 thousand and up from the revised 427 thousand new home sales in December. That was a 9.6% monthly rise in new home sales instead of an expected 3.4% decline.
The rise in new home sales in January contradicted a 16% decline in housing starts and a 5.4% drop in building permits during the same month. New homes only make up 7% of the residential real estate market, but the new home sale comes ahead of the housing start in the construction process, meaning the home sales might be a slightly timelier release. Fed Chair Yellen said earlier this month that only a notable change in the economic outlook could change the taper pace, and therefore better than expected releases may send the dollar higher, like we saw today.
USD/JPY jumped about 10 pips after the release, and the pair may next see resistance by the February 11 high at 102.70.
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USD/JPY 1-Minute: February 26, 2014
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .