USD/JPY drops back closer to over 1-week lows, below 106.00 handle

   •  US political jitters prompt some fresh USD selling.
   •  Risk-off mood provides an additional boost to JPY.

The USD/JPY pair came under some fresh selling pressure on Friday and weakened back below the 106.00 handle, closer to over one-week lows set yesterday.

The US President Donald Trump sacked H.R. McMaster as his national security adviser on Thursday and added to the list of recent high-profile exits from the White House. Against the backdrop of a possible global trade war, the US political turmoil prompted some fresh US Dollar weakness and was seen weighing on the major. 

The news also triggered a fresh wave of global risk aversion trade and provided an additional boost to the Japanese Yen's safe-haven appeal, offsetting the ongoing political scandal in Japan and further collaborating to the pair's heavily offered tone. 

With the latest US political news turning out to be an exclusive driver of the pair's momentum, today's US economic releases - housing market data, industrial production figures and Prelim UoM Consumer Sentiment - would now be looked upon for some immediate respite for the greenback bulls. 

Technical levels to watch

Any subsequent weakness could get extended towards 105.50-45 strong horizontal support, below which the pair could aim towards challenging the key 105.00 psychological mark. 

On the upside, 106.15 level now seems to act as an immediate resistance, which if cleared might trigger a short-covering bounce towards 106.75-80 intermediate hurdle en-route the 107.00 handle.