GBP/USD plummets to lows, nearing mid-1.3900s

   •  Pickup in the USD demand prompts some aggressive selling.
   •  Long-unwinding pressure aggravates the downfall. 

The GBP/USD pair extended its retracement slide from 6-day tops and slipped below the key 1.40 psychological mark in the last hour.

The pair has now retreated over 100-pips from session high level of 1.4070, touched earlier during the European session and the latest leg of sharp fall over the past hour or so was solely led by a goodish pickup in the US Dollar demand. 

Despite the weaker tone surrounding the US Treasury bond yields, the greenback built on its intraday rebound and caught some fresh bid during the early NA session, which eventually seems to have prompted some aggressive selling around the major. 

The fall could also be attributed to some follow-through long-unwinding pressure, especially after bulls struggled to breakthrough a short-term descending trend-line resistance. Hence, a subsequent fall, led by some fresh technical selling, now looks a distinct possibility. 

Traders now look forward to the release of new home sales data from the US for some short-term trading impetus ahead of the scheduled speeches by BOE Deputy Governor Jon Cunliffe and the Fed Governor Randal Quarles. 

Technical levels to watch

Yohay Elam, Analyst at FXStreet writes: “Looking up, the February 16th high of $.14160 is the next line to watch, followed by $1.4280 and $1.4340. On the downside, $1.3905 served as support last week, and it is followed by $1.3770, a bottom that was seen earlier in the year.”