GBP/USD tumbles to session lows, inching closer to 1.3100 handle

   •  Fading Brexit optimism prompts some fresh selling on Wednesday.
   •  GBP further weighed down by softer UK consumer inflation figures.
   •  Focus remains on the EU’s Brexit summit and the FOMC minutes.

The GBP/USD pair maintained its heavily offered tone through the mid-European session and dropped to fresh session lows, around the 1.3120-15 region in the last hour. 

The latest Brexit optimism quickly faded after the European Council President Donald Tusk, on Tuesday, said that a no-deal is more likely than ever before. The pair started retracing from an intraday high level of 1.3267, touched in the reaction of upbeat UK wage growth data, and kept losing ground on Wednesday.

The downfall accelerated further following the release of softer-than-expected UK consumer inflation figures. In fact, the headline CPI surprised to the downside and eased to 2.4% y/y in September, with core inflation falling to 1.9% y/y rate. 

Investors now look forward any fresh Brexit-related headlines coming out of the crucial EU summit, where the UK PM Theresa May will hold bilateral meetings before addressing EU27 leaders and continue to influence sentiment surrounding the British Pound.

Apart from this, the release of the latest FOMC meeting minutes, due later during the US trading session, might drive the US Dollar and further collaborate towards determining the pair's near-term trajectory. In the meantime, the US housing market data will be looked upon to grab some short-term momentum play. 

Technical levels to watch

Any subsequent fall below the 1.3100 handle is likely to find support near the 1.3080 region, below which the pair seems all set to aim towards testing the key 1.30 psychological mark. On the flip side, mid-1.3100s now seems to act as an immediate resistance, which if cleared might assist the pair to make a fresh attempt towards conquering the 1.3200 handle.