USD/JPY drops to fresh session low ahead of US data

Heading into the NA opening session, the USD/JPY pair met with some fresh supply and has now dropped to fresh session low near the 110.35-40 region. 

A fresh bout of volatility, led by BoE monetary policy decision was seen driving flows towards traditional safe-haven assets and benefitting the Japanese Yen. The pair also took a hit on some intense cross-driven weakness, with the GBP/JPY cross tumbling around 180-pips from session tops following perceived dovish assessment of the BoE's quarterly inflation report. 

It would now be interesting to see if the bears remain in control or the pair catches some fresh bids at lower levels amid a modest US Dollar recovery from 15-month lows.

Next on tap would be the US economic docket, featuring the release of weekly jobless claims, ISM non-manufacturing PMI and factory orders data, which would be looked upon for some fresh trading impetus. 

   •  US: ISM Non-Manufacturing PMI and jobless claims in focus - TDS

Technical levels to watch

Immediate support is pegged near 110.25 level, below which the pair is likely to retest sub-110.00 level (August 1 low) before eventually dropping to the 109.60-55 region. On the upside, 110.60-65 area now seems to act as an immediate resistance, which if cleared might trigger a short-covering rally even beyond the 111.00 handle towards its next hurdle near 111.15-20 area.