Housing Shifts, Dollar Climbs, All Eyes on Jackson Hole

The US housing market showed mixed signals in July, with existing-home sales improving on affordability gains, while new construction surged, but future permits slipped. Meanwhile, strains are emerging in the building sector as higher rates weigh on renovation demand. In FX, the US Dollar extended its rebound, testing key resistance levels, and investors now turn their focus to the Fed’s Jackson Hole meeting, where Chair Powell’s remarks could shape expectations for a September rate cut.

Home Sales Tick Up as Affordability Improves

Existing home sales rose 2.0% in July. Sales increased in the Northeast, South, and West, but slipped in the Midwest. Compared to a year ago, sales were higher in the South, Northeast, and Midwest, while the West saw a decline.

The improvement comes from slightly better housing affordability. Wages are rising faster than home prices, and buyers have more options on the market.

The existing-home sales report tracks sales of previously owned single-family houses, condos, and co-ops across the four main US regions.

July Housing: Starts Surge, Permits Slip

In July 2025, the report on new home construction showed a mixed situation. Construction activity itself was strong. The number of housing projects that started construction was up significantly from the previous month and from the year before. The number of homes that were completed also saw a solid increase from June. However, looking ahead, the number of new building permits issued, which signals future construction, was down compared to both last month and July of 2024. This means that while builders are busy right now, they are getting fewer approvals to build new homes, which suggests a potential slowdown in the future.

A Sign of Strain on the American Home

A major building materials company saw its stock price plunge by 35% on its worst day in decades. The crash was caused by a sharp drop in profits and sales.

The company’s CEO explained that high interest rates have created a weak housing market. As a result, homeowners are delaying big renovation projects, and builders are starting construction on fewer new homes. This same cautious sentiment was recently echoed by large home improvement retailers, who also noted that customers are pausing large projects that require financing.

Technical Analysis: Dollar Extends Rebound, Eyes 100

The US Dollar has advanced over 2.8% from the July 1 low of 95.95, underpinned by a rebound that originated with a bullish Inverted Hammer pattern and was later reinforced by a failure swing reversal. The subsequent breakout above 98.62 confirmed the shift in momentum and opened the door to additional upside.

The trend structure has strengthened with price action moving above both the 20- and 50-period Exponential Moving Averages, underscoring improving bullish bias. That said, a Golden Cross—where the 20-period EMA crosses above the 50-period EMA—has yet to be confirmed, suggesting the uptrend is still in the process of consolidation.

Momentum signals remain constructive. The oscillator has climbed above 100, while the RSI continues to hold north of 50, highlighting sustained demand-side pressure.

From a technical perspective, resistance is aligned at 98.62, with further upside targets at 99.34 and 100.01. On the downside, support levels are seen at 97.84 and 96.81, while a deeper retracement toward 95.95 cannot be ruled out should bearish momentum reassert itself.

The Rate Cut Waiting Game

The Federal Reserve’s big annual conference in Jackson Hole is happening, and all eyes are on Chair Jerome Powell’s speech. Investors are hanging on to his every word for a hint about whether the Fed will cut interest rates at its next meeting in September.

The big question is what the Fed will do. With inflation still above their target and the job market cooling off, officials are divided on when to cut rates. Markets are betting on a cut, and political pressure for one is high, but Powell’s speech could signal whether the Fed is ready to act or prefers to wait.

Conclusion

Overall, the US economy continues to send mixed signals. Housing data points to near-term strength but raises questions about future supply, while weakness in construction-related sectors highlights the drag from higher interest rates. The US Dollar’s rebound underscores resilient market demand, though confirmation of a sustained uptrend is still pending. Ultimately, the focus now shifts to the Fed’s Jackson Hole meeting, where Powell’s guidance could set the tone for both currency markets and broader risk sentiment heading into September.