Sterling retreated after hitting a six-week high of 1.4009 but found support above the daily cloud top by 1.3944, where bulls are likely to regroup for another run higher against the vulnerable dollar.
The rise above 1.40 left sterling enthusiasts optimistic nL1N2MD0ZF, especially after UK employment data EM supports the 2021 UK recovery narrative on the back of rapid vaccination success.
GBP spec positioning 1096742NNET is once again rising, underpinned by markets' deference to Fed promises to maintain accommodative policies through rising U.S. growth and expectations that accelerating inflation will prove transitory.
However, without fresh UK-centric impetus, GBP traders may begin to unwind recent longs accumulated over the past six months, when cable rose 7.8%.
Sterling will encounter resistance at the Feb. 26 high of 1.4021, followed by 1.4105, the 76.4% Fib of the recent 1.4240-1.3670 range.
More significant resistance comes at 1.4240, sterling's 2021 and 3-year high.
Bears need a dip below the daily cloud and multiple moving averages.A move below the 100-DMA by 1.3719 would open the way for a more protracted decline toward February lows by 1.3566.
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