GBP/USD surges to 1.31 handle amid notable USD weakness

The greenback continued losing ground across the board and pushed the GBP/USD pair closer to the 1.3100 handle. 

The pair built on Tuesday's strong bullish break through the key 1.30 psychological mark and has now jumped to fresh one-month tops amid persistent greenback selling bias, despite positive development to extend the US debt ceiling until mid-December. 

Escalating geopolitical tensions with N. Korea continued weighing on the buck, with the key US Dollar Index tumbling to fresh YTD lows below the 92.00 handle and had been one of the key factors driving the pair higher through mid-European session. 

   •  N. Korea: US actions are spurring to beef up its defensive nuclear weapons

The British Pound also seems to be benefitting from the latest comments from the UK Brexit Minister David Davis over the need for transition arrangements to stay close to EU membership. 

Next of relevance would be the ECB monetary policy decision, which might influence the pair's movement through the EUR/GBP cross. Later during the NA session, the release of weekly jobless claims from the US would also be looked upon for some short-term trading impetus. 

   •  GBP/USD targets YTD tops once 1.3100 is cleared – UOB

Technical levels to watch

Momentum beyond the 1.3100 handle could get extended towards 1.3125 horizontal resistance, above which the pair is likely to surpass 1.3160-65 intermediate resistance and aim towards reclaiming the 1.3200 handle.

On the downside, any retracement might now find immediate support near mid-1.3000s, which if broken could drag the pair back below the 1.30 handle towards testing 50-day SMA support near the 1.2980 region.