GBP/USD retreats farther below 1.39 handle amid notable USD demand

   •  Bulls struggling to hold gains above the 1.3900 handle.
   •  A goodish USD rebound prompts some fresh selling.
   •  GBP further weighed down by persistent Brexit uncertainties.

The GBP/USD pair once again struggled to sustain/build on its momentum beyond the 1.3900 handle and has now retreated back closer to yesterday's lows.

The pair has failed to find acceptance at higher levels and was now seems capped by persistent uncertainty surrounding the Brexit talks, especially after the EU published draft negotiating guidelines for Brexit on Wednesday and warned of negative economic consequences if Britain does not soften its position. 

Meanwhile, easing trade war fears, backed by White House spokeswoman Sarah Sanders' hints that the expected US tariffs on steel and aluminium imports may exclude few countries, helped the US Dollar to gain some positive traction and further collaborated to the pair's retracement slide from levels beyond the 1.3900 handle. 

In absence of any fresh development, the USD price dynamics is turning out to be an exclusive driver of the pair's momentum through the mid-European session on Thursday. The US economic docket also lacks any major market-moving economic releases and hence, the ECB-led volatility in the market might assist traders to grab some short-term opportunities.

Technical levels to watch

Bears would be eyeing a breakthrough 1.3815-10 region, below which the pair is likely to accelerate the slide back towards the 1.3765 strong horizontal support. On the upside, the 1.3900-1.3910 area might continue to attract some fresh selling pressure, which if cleared decisively might prompt some short-covering move towards its next major hurdle near the 1.3975-80 region.