• USD/JPY declined on Tuesday as the dollar came under pressure after data showed U.S. homebuilding unexpectedly fell in April, adding to recent economic weakness that has raised new doubts over how many times the Federal Reserve will raise interest rates this year.
   
• Housing starts dropped 2.6 percent to a seasonally adjusted annual rate of 1.17 million units, the Commerce Department said on Tuesday. That was the lowest level since last November and followed a downwardly revised rate of 1.20 million units in March.
   
• The weak housing data came after a New York state manufacturing survey on Monday turned negative for the first time since October, and after weaker-than-expected U.S. consumer inflation data for April on Friday.
   
• The pair is set to reach 112.80 and later towards 112.50 in the short term as the US dollar is set to weaken further against its Japanese counterpart in the short term. Therefore it’s good to sell this pair on rally.
   
• To the upside, the strong resistance can be seen at 113.87, a break above this level would take the pair towards next resistance level at 114.36.
   
• To the downside immediate support can be seen at 112.75, a break below this level will open the gates towards next level at 112.36.
  
  Resistance Levels
  
  R1: 113.31 (50% Retracement level)
  
  R2: 113.87 (61.8% Retracement level)
  
  R3: 114.36 (May 10th high)
  
  Support Levels
  
  S1: 112.75 (38.2 % Retracement level)
  
  S2: 112.36 (May 8th lows)
  
  S3: 112.00 (23.6 % Retracement level)