USD/JPY struggles to recover back above 200-DMA

   •  Renewed geopolitical tension does little to revive safe-haven demand. 
   •  Weaker Japanese retail sales data weighing further on JPY.
   •  Sliding US bond yields fails to provide any bullish impetus.
   •  Focus shifts to US GDP revision and Yellen’s testimony.

The USD/JPY pair built on previous session's recovery move from 2-1/2 month lows but was seen struggling to move back above the very important 200-day SMA.

The pair gained some positive traction for the second consecutive session, despite renewed geopolitical tensions over the Korean peninsula. Global financial markets had a rather muted reaction to North Korea's latest ballistic missile test early on Wednesday and eventually failed to boost the Japanese Yen's safe-haven appeal.

The Japanese Yen was further weighed down by today's disappointing retail sales data, coming in to show a y-o-y decline of 0.2% for October as compared to previous month's strong growth of 2.3%. 

Meanwhile, the Fed Chair Designate Jerome Powell's dovish remarks, during his confirmation hearing before the Senate Committee, kept the US Dollar bulls on the defensive and kept a lid on any additional up-move.

Currently hovering around mid-111.00s, traders now look forward to the first revision of the US Q3 GDP figures and the outgoing Fed Chair Janet Yellen's testimony before Joint Economic Committee for some meaningful impetus.

Technical levels to watch

A clear breakthrough 200-day SMA barrier, near the 111.70 region, is likely to accelerate the recovery move towards the 112.00 handle en-route the 112.15-20 zone. On the flip side, any retracement now seems to find immediate support near 111.20 level, which if broken could drag the pair back below the 111.00 handle towards its next support near the 111.70 area.