GBP/USD plummets to lows, back below 1.39 handle

   •  Once again fails ahead of the 1.40 psychological mark.
   •  Reviving USD demand prompts some aggressive selling.
   •  Bears maintain their dominant position ahead of BOE.

The GBP/USD pair finally broke down of its Asian session consolidation phase and tumbled back below the 1.3900 handle, retreating over 100-pips from session tops.

The pair did make an attempt to move higher during the early European session but once again, for the second straight session, failed ahead of the 1.40 handle. A goodish pickup in the US Dollar demand, despite softer US Treasury bond yields, seems to be the only factor prompting some aggressive selling at higher levels. 

The pair's sharp retracement over the past few of hours could also be attributed to some cross-driven weakness steaming out of the GBP/JPY cross, which is now headed back towards near 4-week lows set in the previous session.

It would be now interesting to see if bears are able to maintain their dominant position or the pair is once again able to find some fresh buying interest near the 1.3840-35 region. In absence of any major market moving economic releases on Wednesday, the market focus would remain on BOE's Super Thursday, which would help determine the pair's near-term trajectory.

Technical levels to watch

A follow-through selling pressure has the potential to continue dragging the pair further towards mid-1.3800, below which the downward trajectory could get extended towards the 1.3800 handle.

On the upside, any meaningful recovery back above the 1.3900 handle now seems to confront fresh supply near the 1.3935-40 region, which if cleared could assist the pair to make a fresh attempt towards conquering the 1.40 mark.