US Data (Housing, Jobs, Manufacturing) – and USD’s Reaction

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US Data (Housing, Jobs, Manufacturing) - and USD's Reaction

Today, US Data included Building Permits, Housing Starts, Jobless Claims, and the Philly Fed Manufacturing Index. Let’s start wit the housing data:

Building Permits annualized (August): 1.00M
Forecast: 1.04M
Previous 1.06M
building permits 9/18

 

(source: forexfactory.com; click to enlarge)

Housing Starts annualized (August): 0.96M
Forecast: 1.04M
Previous: 1.12M (revised up from 1.09M)

Housing data has leveled off this year. Building permits is more forward looking than housing starts, so let’s focus on that. The trend of building permits continue to be up since 2009, and we did have a reading in April that was the highest since 2008, but the pace has slowed.

Labor market data impressed:
Jobless Claims this week: 280K
Forecast: 312K
Previous: 316K
jobless claims 9/18

(source: forexfactory.com; click to enlarge)

Jobless claims data peaked in 2009, and has been in a steady downtrend – good news for the labor market. The 280 print for this week is the lowest reading since the financial crisis, and is the lowest since early 2006. While this is a good sign it does not reflect the fact that there is still considerable slack in the labor market. More important will be the job growth, labor force participation, and wage growth data going forward.

Philly Fed Manufacturing Index (September): 22.5
Forecast: 22.8
Previous 28.0
philly fed manufacturing 9/18

(source: forexfactory.com; click to enlarge)

Manufacturing in the Philadelphia region continues to expand, but at a slower rate in September than in August. This was pretty much expected. But when you look at the historic chart, you can see that aside for a contraction in February, manufacturing has been picking up pace throughout 2014.

Mixed US Data – USDX Reaction

US Data today was mixed. We had good jobless claims data, but the significance of this data point is fading. Housing market data and manufacturing data leveled off, though the underlying trend is still positive.

The USD reversed yesterday’s gains. The FOMC statement was NOT hawkish, yet the USD continued higher, and the US Dollar Index made a new high at 84.80 before retreating. If price falls back below 84.00, we can be looking at a meaningful beraish correction with downside risk at least toward the 81.70-82.05 area, which contains support, resistance, a rising trendline and the 50-day simple moving average.

USDX Daily Chart 9/18
usd index
(click to enlarge)

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.