GBP/USD weaker below 1.32 mark as focus shifts to this week's key event risks

The greenback staged a modest recovery during Asian session on Monday, pulling the GBP/USD pair away from over one-month highs touched on Friday.

A combination of factors ranging from doubts over any additional Fed rate hike action by the end of this year and heightened geopolitical tensions with N. Korea had been key factors pressuring the buck in the recent past. 

Adding to this, Friday's stronger than expected data on UK manufacturing output growth provided an additional boost to the British Pound and lifted the major beyond the 1.3200 handle for the first time since early August. 

In absence of any new missile launch by N. Korea over the weekend, improving investors' risk appetite helped the US Dollar Index to rebound from over two-and-a-half year lows touched on Friday and weighed on the major at the start of a new trading week. 

Moving ahead, investors would now be keenly looking forward to the BoE monetary policy decision and the US inflation report in order to determine the next leg of directional move for the major.

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Technical levels to watch

Immediate support is seen near 1.3160 level, which if broken could drag the pair immediately towards 1.3130-20 zone ahead of the 1.3100 handle. On the upside, 1.32 handle now seems to have emerged as immediate hurdle, above which the pair might now surpass 1.3225 intermediate resistance and dart towards its next major barrier near mid-1.3200s.