• USD/JPY declined sharply on Tuesday as weaker-than-expected reading of a U.S. services sector index for August accelerated the pair’s downside.
   
• Institute for Supply Management report on service-sector activity showed a drop in the index to 51.4, down from 55.5 in July and much lower than the consensus expectation for a reading of 55.7.
   
• Further upside is expected to be limited as the pair finds strong resistance at 103.05 which should limit further upside and bring decline towards lower levels in the short term.
   
• To the upside, the immediate resistance can be seen at 102.27, a break above this level would take the pair towards next resistance level at 103.05.
   
• To the downside, immediate support can be seen at 101.66, a break below this level will open the door towards next level at 101.03.
  
  Resistance Levels
  
  R1: 102.27 (38.2% Retracement Level)
  
  R2: 103.05 (23.6% Retracement Level)
  
  R3: 103.81 (Daily high)
  
  Support Levels
  
  S1: 101.66 (50% Retracement Level)
  
  S2: 101.03 (61.8% Retracement Level)
  
  S3:100.00 (Psychological levels)