• USD/JPY declined on Monday as the dollar slumped to multi-month lows on the back of data that pointed to weak U.S. inflation and less prospect of rate hikes.
   
• Recent soft U.S. inflation and domestic demand figures undermined arguments for the U.S. Federal Reserve to raise interest rates, with traders cutting back their bets on the likelihood of an increase in December.
   
• The U.S. dollar nursed losses at a 10-month low against a basket of currencies on Monday as investors cheered upbeat Chinese data by piling into leveraged positions such as the Australian dollar and other high-yielding currencies.
   
• Further upside for this pair is expected to be limited as strong resistance level at 113.56 is set to limit upside and bring decline towards lower levels.
   
• To the upside, immediate resistance can be seen at 112.76, a break above this level would take the pair towards next resistance level at 113.56.
   
• To the downside immediate support can be seen at 112.25, a break below this level will open the gates towards next level at 111.80.
  
  Resistance Levels
  
  R1: 112.76 (38.2% Retracement level)
  
  R2: 113.56 (50% Retracement level)
  
  R3: 114.00 (Psychological levels)
  
  Support Levels
  
  S1: 112.25 (July 14th lows)
  
  S2: 111.80 (23.6% Retracement level)
  
  S3: 111.05 (June 26th lows)