GBP/USD tumbles to lows, back around mid-1.3800s ahead of BOE

   •  Shaky equity markets underpin the USD demand.
   •  Downside seems limited ahead of BOE’s Super Thursday.

The GBP/USD pair faded a bullish spike to the 1.3920 region and quickly retreated around 60-70 pips in the past hour or so. 

A fresh wave of US Dollar buying interest, once again backed by wobbly risk sentiment, was seen as one of the key factors prompting some aggressive selling during the early European session.

Currently holding just above mid-1.3800s, the pair has now retreated back closer to the lower end of its broader trading range held over the past couple of day, which if broken would suggest a fresh bearish break and accelerate the downfall. 

Traders, however, are likely to refrain from placing aggressive bets and would prefer to wait for BOE, which might continue to attract some buying interest at lower levels. 

Today's key focus would be on the BOE's monetary policy decision, which along with the release of minutes and the Quarterly Inflation Report (QIR) would help determine the pair's next leg of directional move. The BOE Governor Mark Carney's post-meeting press conference might also infuse a fresh bout of volatility across GBP crosses.

Technical levels to watch

Sustained weakness below 1.3840-35 immediate support would turn the pair vulnerable to break below the 1.3800 handle and head towards testing 1.3750-45 support area. On the upside, any meaningful up-move back above the 1.3900 handle now seems to confront fresh supply near mid-1.3900s, above which the pair is likely to make a fresh attempt towards conquering the key 1.40 psychological mark.