FxWirePro: USD/JPY largely rangebound, hovers around 121 handle

U.S. currency remained vulnerable to any surprise from the U.S. central bank meeting, a hike has already been discounted but last-minute position adjustments being made.

• Markets cautious, awaiting clues on how the Fed might the pace for additional monetary tightening next year.
   
• Dollar long positions are being liquidated at a faster pace than expected and USD could face additional pressure if U.S. Treasuries are bought back on relief that the Fed's rate hike cycle will be quite a slow one.
   
• Halt in oil and equities slide seen provided some traction to the dollar which halted its slide against the euro and yen. USD/JPY was flat at 121.04, having pulled back from a 6-week low of 120.35 on Monday.
   
• Price action is contained within the Ichi cloud, cloud base at 120.82 is initial support, while 121.31 (cloud top) is immediate resistance on the upside.
   
• US CPI data due later today in the U.S. Session, the last data before Wednesday's Fed rate hike decision will be close watched