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  • USD index recovers ground amid US-Iran tensions led risk-off.
  • EUR/USD consolidates Thursday’s slide, risks further falls.
  • Focus on German Prelim CPI and US ISM Manufacturing PMI.

EUR/USD is seen breaking lower from its familiar 15-pips trading range below 1.1200 ahead of the European open this Friday. The spot looks heavy amid escalating US-Iran geopolitical tensions and busy economic docket across both sides of Atlantic.

US dollar underpinned amid broad risk aversion

The bears regain control following a brief Asian consolidative mode, as EUR/USD extends Thursday’s heavy sell-off. The pair now prints fresh four-day lows near 1.1160, with the next support aligned at 200-DMA of 1.1142.

The main catalyst behind the latest decline in the major is likely the broad-based US dollar recovery, as markets flock to the safety bet, the greenback, in light of escalating US-Iran geopolitical conflict.

The ongoing tensions flared up after the US killed Iranian Major-General Qassem Soleimani, Quds Force Commander, in Baghdad earlier today. Subsequently, the Iranian officials have warned of a major retaliation against the US action, which could likely bolster the safe-haven demand for the buck.

Meanwhile, the shared currency could fall further should the German jobs and CPI data disappoint. Also, of note remains the US ISM Manufacturing PMI data and FOMC December meeting’s minutes among other minority reports.

EUR/USD Technical levels to consider