FxWirePro: USD/JPY slips over 1%, dollar under pressure ahead of US CPI data

Chart - Courtesy Trading View 

USD/JPY was trading 1.08% lower on the day at 131.04 at around 09:55 GMT. Outlook has turned bearish after rejection at 21-EMA. 

The greenback sold off ahead of the key US Consumer Price Index (CPI) data, due later in the day at 13:30 GMT.

Traders reluctant to place any aggressive bets ahead of US CPI report. Rising expectations for smaller Fed rate hikes act as a headwind for the USD .

A slowdown in the US wage growth pointed to easing inflationary pressure. Today's release of the US CPI report will influence the Fed's rate hike path. 

According to CME Group’s FedWatch Tool, a 25 bps rate hike at the Fed’s next event on February 1 looks the most likely scenario.

Major Support Levels: 

S1: 129.50 (Jan 03 low)

S2: 128.77 (Lower W BB)

Major Resistance Levels: 

R1: 131.94 (5-DMA)

R2: 133.20 (21-EMA)

Summary: USD/JPY trades with a bearish technical bias. More downside on cards, test of fresh monthly lows likely.