GBP/USD bounces off lows, retakes 1.39 mark and beyond

   •  Once again faces rejection near 1.40 mark.
   •  Bears now seemed lacking conviction. 
   •  BOE’s Super Thursday holds the key.

The GBP/USD pair quickly reversed a mid-European session dip to sub-1.3900 level and has managed to rebound around 45-50 pips from session lows.

Having once again faced rejection near the key 1.40 psychological mark, the pair turned sharply lower and dropped to an intraday low level of 1.3873. A goodish pickup in the US Dollar demand, further supported by an uptick in the US Treasury bond yields was seen as one of the key factors weighing on the major. 

The USD gains, however, remained capped as investors maintained cautions following the recent rout in global equities. Meanwhile, bearish traders also seemed to refrain from placing aggressive bets and thus, might have prompted some short-covering move over the past few hours.

Today's good two-way moves clearly seem to suggest indecision over the pair's near-term direction ahead of BOE's Super Thursday, which should now play a key role in determining the next leg of directional move.

Technical levels to watch

Valeria Bednarik, American Chief Analyst at FXStreet writes: “The technical picture is bearish short-term as the pair is near the three-week low set this Tuesday at 1.3835. In the 4 hours chart, the pair remains well below a bearish 20 SMA, this last converging with the 38.2% retracement of the latest slump, at 1.4000, while the RSI indicator consolidates around 27 as the Momentum holds flat within bearish territory. Below the mentioned weekly low, the pair has room to extend its decline to the 1.3730/40 region, where the pair has some relevant lows from mid-January.”