FxWirePro: USD/JPY rangebound below 21-EMA, cautious mood ahead of Fed's preferred PCE Inflation gauge

Chart - Courtesy Trading View 

USD/JPY was trading 0.09% lower on the day at 130.06 at around 04:45 GMT, bias remains bearish. 

Despite a slew of data in the US, traders continue to bet on a dovish Federal Reserve when it meets for its interest rate decision next week, February 1.

Data released on Thursday showed US Q4 Annualized Gross Domestic Product (GDP) rose to 2.9% versus 2.6% expected and 3.2% prior.

US Durable Goods Orders jumped 5.6% in December versus 2.5% market forecast and -1.7% upwardly revised prior.

That said, downbeat prints of the US Personal Consumption Expenditures (PCE) details challenged the hawkish Fed concerns.

US Personal Consumption Expenditures Prices weakened to 3.2% QoQ in Q4 compared to 4.3% expected and prior readings. 

Further, Core Personal Consumption Expenditures eased to 3.9% QoQ for Q4 from 4.7% previous readings, versus 5.3% expected.

Thursday's US data continues to point to a decelerating growth outlook with slowing inflation. Fed’s preferred inflation gauge eyed for clear directions ahead of next week’s FOMC.

Analysts expect Core Personal Consumption Expenditures (PCE) - Price Index for December to remain unchanged at 0.2% MoM.

Major Support Levels: 

S1: 129.46 (200H MA)

S2: 127.12 (Lower BB)

Major Resistance Levels: 

R1: 130.08 (5-DMA)

R2: 130.71 (21-EMA)

Summary: USD/JPY trades with a bearish bias. Recovery attempts remains capped at 21-EMA. Technical indicators support weakness in the pair. Decisive break above 21-EMA can change near-term dynamics.