The USD/JPY pair is growing for the third week due to the general market expectations of the tightening of the monetary policy by the USA FRS. Today the JPY is pressed by the Head of the BoJ Haruhiko Kuroda’s commentaries within The Bank's Semiannual Report on Currency and Monetary Control, which noted that the reaching the target inflation level of 2% still remains the priority of the Japan Regulator, so the mild monetary policy will be held until the target is reached.
Now the pair is near the level of 114.45 (Fibonacci correction 61.8%) and can develop the correction from this level, which is confirmed by Stochastic, which is reversing downwards in the overbought area. The lowering can develop to the level of 113.30 (correction 50.0%) and 112.10 (correction 38.2%). However the correction can be short, especially if the USA Retail Sales data, which will be published on Friday, are strong (the growth of April index by 0.6% is expected). In case of the breakout of the level 114.45 the growth can develop to the level of 115.90 (Fibonacci correction 76.4%).
Support levels: 113.30, 112.10, 110.70.
Resistance levels: 114.45, 115.90.