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  • USD/INR extends the year-start recovery amid sustained US dollar (USD) strength.
  • The US airstrikes killed key members of Iran-Iraq militaries in Baghdad.
  • Doubts over Chinese/trade catalysts, Japan off also weigh on the Asian currencies.

USD/INR trades near 71.55, after rising to the 71.62, ahead of the European session on Friday. That said, the quote recently benefited from the US-Iran tussle as it helped the greenback to stay broadly stronger for the second consecutive day.

Following the US officials’ confirmation, via Reuters, that Strikes have been carried out against two targets linked to Iran in Baghdad markets turned risk-off. Details of the incident suggest that the Iranian Major-General Qassem Soleimani, head of the elite Quds Force, and Iraqi militia commander Abu Mahdi al-Muhandis were killed during the strikes.

Read: Iranian TV officially confirms the death of Quds force commander Qasem Soleimani

Risk sentiment was additionally weakened after the US Marines detained pro-Iran militia commanders in Iraq.

With this, the S&P 500 Futures Index not only reversed the early-day gains but also loses nearly 0.80% to 3,232 by the press time.

Also fueling the pair is receding optimism concerning the US-China trade relations as well as odds that the Chinese economy will test new 30-year lows, as said by the CNN.

It’s worth mentioning that the year-end profit-booking and Indian government measures dragged the pair’s during the early days of the week.

Investors will now keep an eye over the US data and FOMC minutes, while also following the trade/political headlines, for fresh impulse.

Technical Analysis

A sustained break of 71.60 enables prices to aim for December month top near 72.00 whereas November month high near 72.40 can lure buyers next. Alternatively, pair’s declines below 100-day EMA level of 71.05 can fetch the quote to a 200-day EMA level of 70.68.