Sterling Holds Near Feb 11 High Amid Dollar Weakness; Bulls Await Break Above 1.3660

Sterling extended its firm bias against the dollar in early Monday trading, with the pair trading around 1.3644, not far from the phase high hit last Friday. The dollar index, after posting a six-week low recently, has shown a lackluster rebound, serving as a key external support for sterling's elevated position.

**Dollar Weakness Forms Core Support**

Improving market risk appetite has been a tailwind for risk assets, while the dollar has correspondingly come under pressure. The dollar index, which tracks the greenback against six major currencies, had earlier slipped to a six-week low near 98.30, and despite a slight stabilization since, it remains in a weak zone. In this context, non-dollar currencies like sterling have received indirect support, allowing GBP/USD to hold onto recent gains.

**Technical Picture Remains Constructively Bullish**

From a technical standpoint, GBP/USD retains a constructive bias. The pair has already broken above the key resistance zone near 1.3500 and remains above the 20-day exponential moving average (EMA), currently around 1.3373, indicating that the recent rebound still has support. The Relative Strength Index (RSI) sits above the 60.00 level, suggesting buyers remain in control of the short-term trend. As long as the pair holds above this moving average, dips may attract buying interest, with the next upside target at the February 26 high of 1.3575, followed by the February 11 high of 1.3713.

**Focus on Breakout Signals Ahead**

Bulls are currently awaiting a decisive break above the 1.3660 resistance level to confirm further upside room. If this is accompanied by further dollar weakness or positive domestic UK factors, GBP/USD could test 1.3713 or even higher levels. Conversely, a break below the 20-day EMA support near 1.3373 would undermine the short-term bullish structure and could trigger a deeper correction.