Japanese retail sales dropped significantly in 17 year. The retail sales fell 9.7 (below expectations) in March. An increase in the sale taxes affected sales. Traders are waiting for tomorrow's monetary policy statement and the BOJ press conference scheduled for Thursday. Ahead of the key events, JPY is trading lower against USD.

USD/JPY

April data indicated a sustained upturn in US service sector output, although the rate of growth eased from the seven-month high recorded in March. This was highlighted by a fall in the seasonally adjusted Markit Flash US Services PMI to 57.8 in April, from 59.2 during the previous month.

Technical view: The pair made the double bottom between 118.30 and 118.54. The 100Dema is found at 118.20 moved from 118.00 to 118.20. Ahead of the FOMC meeting, USD is trading higher against JPY. In case the price breaks below 118.50, it can get up to 118.30. In case the price closes below 100Dema 118.20, bears can challenge 117.20 and 116.50 in the near term. The strong resistance is seen between 119.30 100Dsma, 119.60 20Dsma, and 119.85 50Dsma. In the four-hour chart, we can observe head and shoulder pattern formation. Bulls' last hope is found at 118.20. We have been recommending buying on dips. This view will erase and reverse the trade for the given downside targets. The trading pattern is framed between 119.45 and 118.20. Intraday support is found at 119.00 below this mild support is found at 118.90 and 118.80.We recommend intraday selling below 118.70 with small targets at 118.50 and 118.30. Panic will be triggered below 118.00. On the higher side, buying is likely to emerge above 119.30 with small targets at 119.45, 119.60 and 119.80.