GBP/USD held earlier gains on Tuesday, underpinned by firm risk markets with Janet Yellen, U.S. President-elect Joe Biden's nominee to run the Treasury Department, expected to elaborate on her call for lawmakers to go big on economic stimulus nL1N2JU0ZU.
Cable was holding just below Tuesday's Europe session high at 1.3626.
While enhanced fiscal relief is likely to stimulate U.S. growth in the medium and long term, the rise in debt and its affect on the U.S. balance sheet is seen as a dollar-negative in the short run.
Despite the pound's recent slide away from trend and 2021 highs above 1.3700, based on UK lockdowns and negative-rate expectations, it remains resilient, finding support at its 30-DMA by 1.3521.
The lack of follow-through pushing the pound lower hints that GBP bulls may be gearing up for another test of recent highs.
Bulls are likely to remain in control above 1.3451, the 50% Fib of 1.3190-1.3712 and the Jan. 11 low.
Sterling finds initial resistance at 1.3712, the Jan 14 2021 high, followed by the upper 30-day Bolli at 1.3749 and 1.3773, the weekly high from May 31 2018.
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