Sterling settled near flat in early U.S. trade, at 1.4112, after a tumultuous rally to new 34-month highs above 1.42 nL1N2KU0GO in Asia that exposed concerns that the air may become too thin for GBP/USD near recent peaks.
On the heels of dovish comments by Fed Chair Powell, risk rallied broadly overnight, with the pound leading the way highernL1N2KT1O9.
Sterling has benefited from a rapid vaccine rollout and the end of lockdowns that are expected to unleash a wave of growth, but its rise above 1.42 met significant resistance as dealers begin to seek out downside protection nL1N2KU0RE following a mostly one-way rise of 8% over the past six months.
Sterling finds resistance above 1.42 at 1.4235/40 and 1.4295, Refinitiv Matching's overnight high, followed by 1.4376, sterling's 61.8% Fibo projection from 1.3566 lows.
GBP support can be found at the 10-DMA by 1.3961, followed by the monthly cloud top at 1.3872.
However, bulls are likely to remain in control above 1.3454 the 50% Fib of 1.2688-1.4235's September-February rise.
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