GBP/USD slips below 1.2300 mark, fresh session lows

The GBP/USD pair finally broke down of its two-day-old consolidative trading range and weakened farther below the 1.2300 handle during the early North-American session.
 
With investors looking past the latest Brexit optimism, a sudden pick up in the US Dollar demand - primarily on the back of the post-ECB slump in the shared currency - turned out to be one of the key factors exerting some downward pressure on the major.

USD regains traction on dovish ECB

The greenback held on to its strong intraday gains back closer to multi-year tops and seemed unaffected by a sharp intraday free-fall in the US Treasury bond yields - further fueled by Thursday's rather unimpressive US consumer inflation figures.
 
Data released this Thursday showed that the headline US CPI 0.1% in August and the yearly rate unexpectedly ticked lower to 1.7% from 1.8% previous, which, to a larger extent, was negated by hotter-than-expected core CPI figures.
 
Despite the intraday pullback, some cross-driven strength - stemming out of the drop in the EUR/GBP cross to near three-month lows - helped the pair to defend 50-day SMA support, at least for the time being.
 
Hence, it will be prudent to wait for a strong follow-through selling before confirming that the recent rally has already run out of the steam and positioning for any further near-term depreciating move, possibly back towards the 1.2200 handle.

Technical levels to watch