GBP/USD extends gains towards 1.3800 as USD remains pressured

• GBP/USD preserves the upside momentum since Monday.
• US Dollar Index stages decline sub-92 levels.
• Sliding US Treasury yields undermine the greenback.

After closing higher on Tuesday, the GBP/USD pair is extending the upside momentum in the early European session, touching the highest level in three days near 1.3775.

At the time of writing, GBP/USD is trading at 1.3774, up 0.19% on the day.

The US dollar index (DXY) weakness remains the primary driver of GBP/USD’s movements lately.  The index refreshes multi-week lows near 91.70. The US Bureau of Statistics monthly report released on Tuesday showed the Core Consumer Price Index(CPI) rose to 1.6% on a yearly basis in March, which triggered a sell-off in the dollar.

On the other hand, GBP is riding higher on the optimism surrounding the “stage two” of lifting lockdown that began on Monday. On the economic data front, the UK Gross Domestic Product (GDP) rose by 0.4% in February, missing the market consensus of 0.6%. However, investors shrug off downbeat data and remain optimistic about future growth as the restrictions being eased would result in the pick of economic activities in the coming months.

As for now, the focus shifts toward speeches from the Bank of England( BOE) MPC Member Professor Jonathan Haskel and the Fed Chair Jerome Powell later in the day. Traders would look out for insights into the growth and inflation prospects before placing aggressive bets.

GBP/USD technical levels