GBP/USD bulls fail near 1.40 mark, retreats from 2-week tops

   •  A goodish USD rebound prompts some profit-taking at higher levels.
   •  US monthly retail sales/PPI figures eyed for fresh impetus.

The GBP/USD pair retreated over 50-pips from two-week tops and has now dropped to fresh session lows, below mid-1.3900s, eroding part of previous session's strong up-move.

The pair's bullish momentum stalled ahead of the key 1.40 psychological mark and was being capped by easing USD bearish pressure. In fact, the key US Dollar Index has managed to turn positive for the day and has been one of the key factors prompting some profit-taking around the major.

Investors seem to have digested yesterday's in-line US consumer inflation figures, which dampened expectations for aggressive Fed rate hike moves in 2018, and the latest White House exit. 

Traders also shrugged off the US President Donald Trump's plans to impose tariffs on China that revived global trade war fears, with Draghi's comments on the effect of Euro strength on the region's inflation prompting some selling around the EUR/USD major and lending some support to the greenback.

In absence of any major market moving economic data from the UK, the USD price dynamics might continue to act as an exclusive driver of the pair's momentum through the European trading session. Later in the day, a duo of US macro releases - monthly retail sales and PPI figures, would now be looked upon for some fresh impetus. 

Technical levels to watch

Previous strong resistance, near the 1.3920-10 region, now seems to act as an immediate support, which if broken might prompt some additional weakness towards its next support near the 1.3850-45 area. On the upside, bulls would be eyeing for a follow-through momentum beyond the 1.40 handle, above which the pair is likely to aim towards testing the 1.4030-40 hurdle.