Summary: 

• US building permits and housing starts both miss forecasts
• Soft data causes USD rise to pause
• Gold attempts to rise from its lowest level in more than a week

The most recent data on the US housing market has come in as something of a disappointment with both building permits and housing starts missing forecasts. With the vast majority of US data this year coming in on the strong side, the housing market has been one of the weakest. Building permits have now missed forecasts on 4 of the last 6 occasions and when you consider that the prior month’s number was today revised lower to 1.27M from 1.30M previously, it is another negative print.

 Both housing permits and housing starts have fallen again with both metrics now not far from 0% in terms of YoY growth. Source: xStation

 Housing start in September were also worse than expected with the 1.13M recorded the lowest in 4 months and below the consensus forecast of 1.18M. Similarly to building permits this economic indicator has disappointed 4 times in the last 6 months and together they do represent a housing market that is performing worse than expected. 

In terms of market reaction there has been some softening of the US dollar since the data dropped, but it should be noted that the moves are fairly subdued (as you’d expect with 2nd tier data). The buck had been enjoying some significant gains on the day prior to the release but these have been pared back a little since the numbers were announced. 

 The USD remains higher on the day despite the slightly negative data. Source: xStation

Elsewhere there has been a small move higher in Gold after the precious metal fell to its lowest level in more than a week this earlier. The market has now retraced to the 61.8% fib level of the gains seen from the start of the month and this could now be seen as an important support. Should 1278 be defended then a recovery could occur with the 38.2% fib level at 1288 a possible overhead resistance. However, should the market fall below 1278 then the whole move higher could be handed back with 1260 then an area to look for possible support. 

 Gold has now retraced to the 61.8% fib of the latest move higher. 1278 could now be seen as pivotal support. Source: xStation