USD/JPY drops to test daily lows after FOMC minutes

USD/JPY fell to test daily lows after the release of the FOMC minutes. The pair dropped from 113.55 back toward the 113.00 area. It traded momentarily below 113.00 but again managed to rise back above. 

Currently, the pair trades at 113.05/10 and holds a bearish tone as the US dollar falls in the market. The yen gained momentum across the board, boosted by a recovery in US bonds. The 10-year yield dropped from 2.45% to 2.41% after the Fed’s document. 

The minutes showed that many FOMC official saw rate hikes “fairly soon” if the economy remains on track. The Committee will start a debate on the balance sheet at the upcoming meetings. 

Technical levels 

The minutes pushed the price back to the 113.00 handle that since the beginning of the week has been a relevant support area. Below here, the next level to watch could be seen at 112.55/60 (Jan 17, Feb 17 low) and 112.05     (Feb 02 low). On the upside, resistance now might be located at 113.35 (20-hour moving average), 113.70/75 (daily high) and 114.05.