GBP/USD struggles to build on gains beyond 1.39 handle

   •  The US government shutdown continues to weigh on the USD.
   •  Investors seemed reluctant to place fresh bets ahead of this week’s macro releases. 

The GBP/USD pair once again failed to build on its strength above the 1.3900 handle and quickly retreated around 20-pips from session tops. 

The US government shutdown continued weighing on the US Dollar and helped the pair to regain some positive traction at the start of a new week. The pair recovered a major part of Friday's disappointing UK retail sales data-led losses but struggled to gain any follow-through traction. 

Meanwhile, optimism that a Brexit transition period will be confirmed in the coming months might continue to lend some support to the British Pound and limit any immediate sharp corrective slide. 

Meanwhile, traders now seemed reluctant to place aggressive bets and preferred to wait for this week's important macro releases from the UK and the US for some fresh directional impetus. The UK jobs report, along with the first GDP estimates from the US and UK would now provide the next fundamental trigger and help determine the pair's near-term trajectory.

In the meantime, the USD price dynamics, influenced by any fresh political news, would continue to act as an exclusive driver of the pair's momentum amid absent macroeconomic releases on Monday. 

Technical levels to watch

Momentum beyond 1.3915 level could get extended towards the 1.3940-45 heavy supply zone, which if cleared should now assist the pair to dart towards reclaiming the key 1.40 psychological mark.

On the flip side, the 1.3860 area now seems to have emerged as immediate support and is closely followed by support near the 1.3835 region, below which the pair is likely to head towards challenging the 1.3800 handle.