GBP/USD steadies at 9-week lows near 1.2930 as USD comes out of Easter on top

• US Dollar Index jumps to highest level since June 2017.
• New home sales in the U.S. rises more than expected in March.
• PM May’s spokesman says focus is passing the withdrawal agreement bill.

The GBP/USD came under strong bearish pressure in the second half of the day on Tuesday and slumped to its lowest level since February 19 at 1.2929. As of writing, the pair was trading at 1.2936, losing 0.35% on a daily basis.

The broad-based USD strength today became the primary driver of the pair’s price action. After closing the previous week in the positive territory, the greenback preserved its bullish momentum with investors returning from the Easter break and advanced to its highest level since June 2017 at 97.78.  

The only data from the U.S. today showed that new home sales increased by 4.5% on a monthly basis in March to beat the market expectation for a decline of 2.5%. Nevertheless, the decisive upsurge witnessed in Wall Street on the back of strong first-quarter earnings figures eased concerns over an economic slowdown in the United States and allowed the buck to outperform its rivals with investors starting to dismiss the idea of the Fed keeping its dovish stance.

On the other hand, the lack of Brexit-related headlines made it difficult for the British pound to gran markets’ attention. Earlier today, British Prime Minister Theresa May’s spokesman told reporters that the PM’s focus was passing the withdrawal agreement bill and repeated that both sides, Labour party and the government, needed to compromise in order to reach a deal.

Technical levels to consider