GBP/USD faces rejection at 1.40 handle, retreats to daily lows

   •  Fails to capitalize on early up-move. 
   •  Recent softer UK data continue to weigh.

The GBP/USD pair seems to have faced rejection at the key 1.4000 psychological mark and quickly retreated around 40-pips from session tops. 

Against the backdrop of some renewed US Dollar selling pressure, the pair did attempt a minor recovery this Tuesday but was being capped by the recent softer UK economic data. 

The latest disappointment came from Monday's UK Markit services PMI for January, which added to last week's weaker UK manufacturing and construction PMIs, and kept a lid on the pair's early bullish attempt. 

Traders now look forward to the second-tier US economic releases - trade balance and JOLTS job openings data, which along with Fedspeaks might provide some short-term trading opportunities.

Technical levels to watch

A follow-through selling pressure has the potential to continue dragging the pair further towards testing the 1.3900-1.3890 support area en-route mid-1.3800s. On the upside, the 1.4000 handle might continue to act as immediate resistance and any subsequent up-move is likely to be capped near the 1.4035-40 supply zone.