GBP/USD finds resistance near 1.32, stays in green despite broad USD strength
- US Dollar Index extends rebound, turns positive for the week.
- Irish PM says no one would welcome a 9-month extension.
- Manufacturing activity softens in the U.S.
After closing the previous two days in the negative territory, the GBP/USD pair gained traction and recovered to 1.32 area. As of writing, the pair was trading at 1.3188, adding 0.62% on a daily basis.
The disappointing data from the euro area earlier today put the shared currency under heavy selling pressure and helped the GBP find demand, as confirmed by the sharp drop witnessed in the EUR/GBP pair. Moreover, the fact that the EU granted an extension to the Article 50 negotiating period until April 12 helped the British pound by bringing in some clarity on Brexit.
Commenting on the latest Brexit developments, Irish Prime Minister Leo Varadkar earlier today said that there was Brexit fatigue across both the EU and the UK and no one would welcome a 9-month extension. Regarding the different options the government will be reportedly presenting on parliament, Varadkar argued that customs union would solve a lot of problems they were facing and that he would be delighted if parliament chose that.
On the other hand, the US Dollar Index preserved its bullish momentum on Friday and erased all of this week's losses to turn positive on the weekly chart as the greenback seems to be taking advantage of the risk-off flows as reflected by the 4% drop seen in the 10-year T-bond yield.
Earlier today, the data published by the IHS Markit revealed that the business activity in the manufacturing and service sectors in the U.S. expanded at a softer rate than expected in March.
Technical levels
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
