INR update: Iran retaliates; markets maintain calm as Trump’s address is awaited

Iran fired missiles at American bases in Iraq today. The same was confirmed by US while Iran said that its revenge action is complete and it seeks no war. The US President is to address the nation on Thursday morning. In case the missile attacks would have led to loss of American lives then the retaliation from the US would be severe. Otherwise the market seems to be pricing in little possibility of further escalation in the tension between the two countries.

USDJPY initially moved lower from 108.50 to 107.65 levels but is now trading higher at 108.30 levels indicating that risk sentiments are not hit as much as one would have expected. Yuan continues to appreciate (CMP 6.9450), a weekly closing below 6.92 would indicate that 6.85 is on the cards.

Technically USDINR has broken 71.85 convincingly now (CMP 72.03), and the next major resistance is at 72.25 and 72.44 levels. Although a lot of chunky inflows are in the pipeline in the next 2 weeks, the geo political tension muddies the waters making it difficult to form a clear view. CMP 72.03, Range 71.85-72.25.