USD/JPY remains on track for its first monthly decline since Sept.

After failing to move back above 114.00 handle, the USD/JPY pair ran through fresh offers and touched a fresh session low level during early NA session.

The US President Donald Trump's decision to ban immigrants from seven predominantly Muslim countries, and subsequent dismissal of the Attorney General, continues to weigh on investor sentiment and benefitting the Japanese Yen's safe-haven appeal. 

On the US economic data front, upbeat Case Shiller house prices index, which got negated by lower-than-expected release of employment costs index, provide little respite for the bulls and the pair maintained its offered tone for the second consecutive session. Nevertheless, the pair remains on track to snap three consecutive months of winning streak and register its first monthly loss since September 2016.

Next on tap would be the release of Chicago PMI and CB's Consumer Confidence index for the month of January, which would be looked upon for short-term trading impetus ahead the Fed announcement during NY session on Wednesday. 

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet notes, "the downward strength eased according to the 1 hour chart, but the risk remains towards the downside, as the price remains below the 100 and 200 SMAs, whilst technical indicators turned modestly higher, but remain within negative territory. In the 4 hours chart, technical readings present a clearly bearish stance, with the 100 SMA extending its slide below the 114.00 level, and indicators maintaining bearish slopes near oversold readings. The pair bottomed around 112.50 the past two weeks, with a break below the level confirming the dominant trend and opening doors for a continued decline down to the 110.00 region."