• USD/JPY traded in slightly higher in range as dollar strengthened on expectations that U.S. interest rates will go up this month, a view reinforced by a string of positive economic data.
   
• Recent upbeat U.S. data, including non-farm payrolls and factory and services sector activity have pointed to a recovery in the world's biggest economy, clearing the way for the Federal Reserve to raise interest rates next week.
   
• Investors are now shifting their focus to the upcoming Federal Reserve policy meeting next week, where traders see a 92 percent chance of an interest rate hike.
   
• Further downside is expected to be limited as the pair finds strong support at 112.87 should limit further decline and bring rebound towards higher levels in the short term.
   
• To the upside, the strong resistance can be seen at 114.74, a break above this level would take the pair towards next resistance level at 115.52.
   
• To the downside immediate support can be seen at 113.41, a break below this level will open the door towards next level at 112.87.
  
  Resistance Levels
  
  R1: 114.06 (50% Retracement Level)
  
  R2: 114.74 (38.2% Retracement Level)
  
  R3: 115.52 (23.6% Retracement Level)
  
  Support Levels
  
  S1: 113.41 (61.8% Retracement Level)
  
  S2: 112.87 (Dec 5th low)
  
  S3: 112.00 (Psychological levels)