GBP/USD hits near 3-week tops, around mid-1.3200s

   •  Softer than expected US CPI figures prompt some aggressive USD selling.
   •  Trump’s criticism over Fed rate hikes exerts additional pressure on the buck. 

The GBP/USD pair quickly reversed an early European session dip to a session low level of 1.3182 and refreshed daily tops, around mid-1.3200s post-US CPI.

The US Dollar weakened across the board in a knee-jerk reaction to softer-than-expected US consumer inflation figures, showing that the headline CPI rose a modest 0.1% m/m in September. 

Adding to the disappointment, core CPI, which excludes food and energy prices, also fell short of market expectations and the yearly rate unexpectedly held steady as against a minor uptick anticipated.

The greenback was further weighed down by the US President Donald Trump's criticism over the pace of Fed rate hikes, saying that the Fed is too aggressive and that they are making a big mistake. 

Against the backdrop of recent Brexit optimism, a fresh wave of USD selling pressure lifted the pair to near three week tops during the early North-American session, marking its fifth session of positive movement in the previous six.

It would now be interesting to see if the pair is able to build on the bullish momentum or traders opt to take some profits off the table, especially after the latest leg of an upsurge of over 200-pips in the past three trading sessions.

Technical levels to watch

Any subsequent up-move is likely to confront resistance near the 1.3265-70 region, above which the pair is likely to aim towards reclaiming the 1.3300 round figure mark. On the flip side, the 1.3200 handle now seems to protect the immediate downside and is closely followed by a support near the 1.3180 region.