USD/JPY drops to 110.50 on broad dollar weakness ahead of FOMC minutes

Currently, USD/JPY is trading at 110.53, down -0.12% on the day, having posted a daily high at 110.96 and low at 110.46.

USD/JPY has dipped lower in a sharp 30 pip drop as the DXY moves lower across the board. However, we now await the FOMC minutes as the next catalyst.

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FOMC minutes:

“Focus will remain on the discussions of the timing of quantitative tightening (we still expect tightening to be announced in September) and any comments on how concerned the Fed is about the low inflation which it now describes as 'below 2%' (previously 'somewhat below 2%')," argued analysts at Nomura

Analysts at Brown Brothersman explained that a move above JPY114.30, last weeks high is needed to confirm a franc low is in place.  "The JPY114.65-JPY114.75 area houses the 38.2% retracement objective of the last leg down that began on July 25 near JPY118 and the 20-day moving average.  The franc has not closed above its 20-day moving average against the yen since July 21. "

USD/JPY levels

Analysts at Commerzbank explained they believe that another interim low was formed at 108.72 in August. "Failure at 108.72 is needed for slippage to the 108.13 April low. Where are we wrong? Below 108.13 would target the 107.49 July 2016 high, then 106.50, the 61.8% retracement of the move 2016-2017."