According to the latest US House Price Index (HPI) monthly figure released by the FHFA, house prices only rose by 0.2% for the month of August. The July 2019 figure had been at 0.4% and a market consensus figure of 0.4% was the expected benchmark. The latest figure has therefore fallen short of expectations.
The US House Price Index (m/m) measures the changes in prices of homes that are purchased using mortgages provided by Freddie Mac and Fannie Mae, the two biggest home loan providers in the US.
In terms of immediate market impact, this news release has paled in comparison to the years immediately after the subprime mortgage market collapse triggered the global financial crisis. However, the information it provides continues to remain relevant to medium-term and long-term traders who base their decisions on the housing industry data.
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The USDJPY has not had a remarkable response to the news (as expected) but remains contained within the range formed by the 108.26 price floor and 108.86 price ceiling. I do not expect much of a change in the neutral outlook on this pair until we get more trade-related headlines which may define risk sentiment plays. I would also watch for any market chatter US interest rates for any form of direction on this pair.
Near term resistance levels lie at 108.55 (central pivot) and 108.72 (previous highs of October 18 and October 22). Price needs to break the central pivot price of 108.55 to open the door towards 108.72.
On the flip side, 108.42 remains the next support with potential to form a downside target if price is able to retreat. 108.37 (S2 pivot) remains another downside possibility in the near-term.