USD/JPY surrender early gains, retreats back closer to 111.00 handle

Having failed just ahead of mid-111.00s, the USD/JPY pair has now reversed majority of daily gains and is currently trading around 111.10 region.

Retracing US treasury bond yields failed to support the greenback's overnight recovery move, with the key US Dollar Index pulling-back from the key 100.00 psychological mark and capping further up-move for the major. 

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Meanwhile, a slightly weaker trading sentiment around equity markets further boosted the Japanese Yen's safe-haven appeal and collaborated to the pair's retracement from multi-day tops. 

Moving ahead, the final revision of the US GDP numbers for the fourth quarter of 2016 would grab the spotlight later during early NA session. Apart from the growth numbers, speeches from couple of FOMC members - Dallas Fed President Robert Kaplan and San Francisco Fed President John Williams would also be looked upon for impetus later during the NY trading session.

Technical levels to watch

A follow through retracement below the 111.00 handle is likely to extend the slide towards 110.65 horizontal support before the pair eventually drops to the key 110.00 psychological mark. On the upside, sustained momentum above mid-111.00s is likely to trigger a short-covering rally towards 111.75-80 resistance en-route 112.00 round figure mark.