After the push above 1.3600, the latest nudge higher to test the 200-day moving average was coming but it needed confirmation from the US CPI report yesterday. Despite 7% US inflation, markets shrugged the report as it did not exceed expectations and the dollar slumped. And the drag in the greenback is continuing into today.

GBPUSD D1 13-01

As things stand, buyers are now facing a key technical resistance level and must hold above it into the close in order to extend the upside momentum further. Quite honestly, a lot of the positive factors on the Fed front has already been priced into the dollar and with the breakout in EUR/USD, we're likely seeing more of a short squeeze in positions here.

That could help to propel GBP/USD even higher above the resistance highlighted above, allowing buyers to retest 1.3800 and the October highs around 1.3830-33 next. I reckon that might be a good area for sellers to lean on but in the meantime, it looks like the dollar could face more pressure with technical levels cracking across the board.