By GrowthAces.com

• U.S. National Association of Realtors reported a 2.5% drop in the Pending Home Sales Index for November, well below the consensus forecast of 0.5% mom increase. It is a negative sign for existing home sales prospects in December and January, though it is still at a level suggesting very strong sales. We expect that demand for new homes remains strong enough to drive construction spending higher, particularly when paired with low inventory and climbing prices. Mortgage rates have begun rising, however, and that will slow those trends.
• The NAR’s Chief Economist, Lawrence Yun, blamed those rate gains for this report’s disappointment. “The budget of many prospective buyers last month was dealt an abrupt hit by the quick ascension of rates immediately after the election. Already faced with climbing home prices and minimal listings in the affordable price range, fewer home shoppers in most of the country were successfully able to sign a contract.”
• The dollar slipped to a two-week low against the yen on Thursday, mirroring a fall in U.S. bond yields as weaker-than-expected economic data weighed on the greenback. Yields on 10-year U.S. Treasury yields – which have in recent months been closely correlated with the dollar/yen exchange rate – fell to their lowest in two weeks, having soared to a more-than-two-year high above 2.6% earlier in the month.
• Let’s take a look at 10-year U.S. Treasury yield:

• The USD/JPY broke below 14-day exponential moving average today. We think this is not a strong bearish signal, as market is in holiday mood. We expect the USD/JPY corrective move will end near 115.60 and currency bulls may attack 119.52 (76.4% fibo of 2015-2016 fall) in January.

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By GrowthAces.com – Daily Forex Trading Strategies