GBP/USD struggling to reclaim the 1.40 handle with a tense GDP Friday in the barrel

• The Sterling is looking for some buyers, but downside pressure remains ahead of a thin showing on the calendar for Thursday.
• The countdown to Friday's GDP prelim double-header is on, with the UK and US GDPs on the books.

The Sterling has caught some lift in early Thursday trading, back into the 1.3950 region ahead of the European markets.

GBP/USD analysis: failed attempt to regain 1.40 fuels bearish mood

The GBP/USD has been struggling to pump the brakes on a decline that started last week which sees the pair off of its April high of 1.4376. A dollar recovery that kicked off on renewed confidence bled into a surge in USD buyers as 10-year US Treasuries clambered over the critical 3% yield mark. Adding to Sterling's recent weakness has been a slew of economic figures that have missed the mark, and an unsure Bank of England (BoE) that has been left on unsteady footing heading into their May rate call, which markets have already priced in as an eagerly-awaited rate hike.

Thursday sees a light showing for the GBP on the economic calendar, with low-tier BBA Mortgage Approvals at 08:30 GMT (forecast 37.1 thousand, prev. 38.12 thousand), followed by the CBI Distributive Trades Survey at 10:00 GMT (forecast 5%, prev. -8%). With such a minimal schedule in the offering, traders' eyes will largely already be turning to Friday's GDP numbers, which see preliminary quarterly GDP figures for the UK at 08:30 GMT and the US side at 12:30 GMT. The UK's GDP is expected to hold steady at 0.4% QoQ, while the US annualized GDP is forecast at 2.3%, a decline from the previous reading of 2.9%.

A miss for the UK's GDP would all but clinch a sudden reversal of the BoE's recent bullishness and send the Cable tumbling, while US GDP numbers are a critical assessment tool of the US Fed, and a likewise miss would begin to cast serious doubts on the Fed's current rate increase path.

GBP/USD Levels to watch

As noted by FXStreet's Chief Analyst Valeria Bednarik, the Sterling's recent fight to clamp down on the slide lower has popped some key technical indicators, but the bearish bias remains firmly in place: "technically the 4 hours chart shows that the 20 SMA acted as a dynamic resistance a couple of times through the day, currently at 1.3966. The Momentum indicator has managed to recover up to its mid-line, but remains below it while the RSI hovers around 33, limiting chances of a firmer recovery. Below 1.3920, the decline could continue toward 1.3770, the next big static support."

Support levels: 1.3920 1.3880 1.3840

Resistance levels: 1.3965 1.3990 1.4025