USD/JPY: early offers below 100 ahead of Tokyo

USD/JPY has broken below the 100.00 level in early Asia ahead of tokyo opening and the potential for further downside on the back of the FOMC minutes overnight. 

The FOMC minutes have fuelled further softness in the greenback and have made for speculation that the Fed will not be hiking in September or December if there is not a dramatic improvement in the US economy. 

FOMC minutes: Divergence about when to raise rates

At the previous meeting, the Fed held again but came across hawkish in the statement. However, the market has not really been buying the statement that said, "Near term risks to economic outlook have diminished," and the dollar has remained fragile since.  

The minutes overnight actually showed that voters agreed to wait for more data to gauge the economy while also showing that some Brexit medium and long-term risks exist from abroad. Most notably,  the FOMC were also divided on whether job-gain pace worrisome.

How volatile has USD/JPY been?

On the hourly USD/JPY chart, ATR (14) is presently at 25 pips, while 2-Standard Deviation Volatility Bandwidth is expanding and currently 113 pips. On a daily chart, 2-Standard Deviation Volatility Bandwidth is expanding at 835 pips. Over the past four weeks, 25 pips has been the average movement for the current session. Following the four week period average, today’s most volatile hour was between 3:00-4:00 GMT which has an average movement of 47 pips.

What price levels and patterns have to be considered?

With spot trading at 99.90, we can see next resistance ahead at 100.04 (Yesterday's Low), 100.27 (Monthly Low), 100.27 (Weekly Low), 100.27 (Annual Low) and 100.28 (Daily Open). Support below can be found at 99.75 (Weekly Classic S2), 99.73 (Daily Low), 99.47 (Daily Classic S1), 98.66 (Weekly Classic S3) and 98.62 (Daily Classic S2).