US Dollar Loses Ground to Yen Amid Depressing Housing Starts Data

The US dollar appeared bearish against the Japanese yen after the US Census Bureau published the housing starts data, which came out at 1.05 million against the forecast of around 1.18 million.

Housing starts represent the annualized number of residential buildings that initiated construction work during the previous month. It has a direct impact on the overall US economy because housing construction creates demand for a number of products and services. Although the housing starts number declined over the last month, US building permits figure came out at 1.23 million against last month’s 1.15 million. The increase in building permits indicates that there would be an increase in building construction in the coming months.

As of GMT 16:39 PM, the USD/JPY traded at 103.35, after declining around 60 pips since opening at 103.86 during the Tokyo session this morning. USD/JPY is currently trading near the support level around 103.15, which is the 50% Fibonacci retracement level of the last major upward swing between 98.82 and 107.49.

If USD/JPY breaks below the support around the 103.15 level on the daily time frame, it would likely attract additional bearish momentum that may push the rate much lower in the next two days of the week.

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