GBP/USD retests 1.3925-20 support area ahead of US data

   •  Once again struggles to break past the key 1.40 psychological mark. 
   •  A modest USD rebound prompts some long-unwinding trade.
   •  Second-tier US economic data eyed for some fresh impetus.

The GBP/USD pair once again failed ahead of the 1.40 handle and has now dropped back closer to 1.3925-20 previous resistance turned immediate support. 

A modest US Dollar rebound remained capped amid growing worries over a full-blown trade war but did little to assist the pair to build on its recent bullish momentum. 

The retracement of over 60-pips from session tops lacked any fundamental trigger and hence, could be attributed to some long-unwinding trade, especially after the pair's repeated failures to move past a psychological important hurdle. 

Investors also seemed to hold back from any fresh bullish bets, amid persistent uncertainty around Brexit negotiations and could have further contributed to the pair's intraday fall. 

In absence of any major market moving data from the UK, the USD price dynamics might continue to act as an exclusive driver of the pair's momentum ahead of the second-tier US economic releases – regional manufacturing indices and the usual initial weekly jobless claims. 

Technical levels to watch

Any subsequent weakness is likely to find support near the 1.3900 handle, below which the pair seems to head back towards 1.3850-45 support area en-route the 1.3800 round figure mark. 

On the upside, momentum above 1.3960 level might continue to confront some fresh supply near the 1.40 handle, which if cleared decisively could accelerate the up-move towards the 1.4030-40 resistance.