GBP/USD turns positive above 1.32, looks to close second straight week higher
- GBP/USD sticks to small daily gains, floats above 1.32.
- DXY on track to close the week below 94 for the first time in four weeks.
- Positive comments from Brexit talks help the GBP preserve its strength.
After dropping to a fresh daily low at 1.3170, the GBP/USD pair reversed course and advanced above the 1.32 mark in the US afternoon. As of writing, the pair was trading at 1.3212, adding 0.15% on the day.
Although the macroeconomic calendar didn't feature any data from the UK on Friday, the market demand for the GBP remained relatively high amid some optimistic comments from the meeting between British Prime Minister Theresa May and European Council President Donald Tusk. Speaking to reporters, Tusk said there wasn't a deadlock in Brexit talks and added that they needed to make progress on citizens' rights and the financial settlement before the December summit.
- GBP: Bulls retain faith in Brexit progress as talks enter ‘squeaky bum time’ - ING
On the other hand, today's upbeat macroeconomic data from the United States failed to help the US Dollar Index stage a decisive recovery towards the 94 handle as the negative market sentiment weighed on the greenback. In October, building permits and housing starts in the U.S. increased by 5.9% and 13.7% respectively. Nonetheless, rising geopolitical concerns amid North Korea's refusal of diplomatic talks with Washington ramped up the demand for safe-haven T-bonds, weighing on their yields and, hence, the DXY. As of writing, the 10-year US T-bond yield was down nearly % while the US Dollar Index was losing 0.3% at 93.55.
- US: Building permits in October were at 1,297,000, 5.9% above September
On a weekly basis, the pair is adding around 100-pips. This week's strong data from the U.K. and the broad-based USD weakness were the primary drivers of the pair's price action.
With a daily close above 1.3220, where the 100-WMA is located, the pair could extend its gains toward 1.3320 (Nov. 11 high) and 1.3400 (psychological level). On the downside, supports could be encountered at 1.3200 (psychological level), 1.3150 (100-DMA) and 1.3060 (Nov. 13 low).