BUZZ-COMMENT-February may defy sterling's downward trend

Feb 4 (Reuters) - A brave call considering the current fundamental backdrop but following four straight months of losses versus the dollar, the pound is showing recovery potential, on the longer-term charts at least.

A more pronounced dollar attack on the euro, sending EUR/GBP to a low of 0.8280 Monday from January's 0.8473 high, has slowed sterling's depreciation versus the outperforming dollar and helped underpin a late recovery into Monday's close.

A look at the weekly and monthly charts shows a glimmer of hope that the GBP/USD might stage a recovery through February.

The market has climbed away from the significant mid-January 1.2100 low and although the dollar looks menacing, a rising weekly Ichimoku cloud baseline and a June 1.2866-72 twist could drag on further weakness.

The 10-week moving average, which has defined the weekly bear trend since October, is the main hurdle and is currently at 1.2457.

Monthly price action also suggests the dollar might be relaxing its longer-term grip on the pound. The four-month slide breached the monthly cloud top but failed to close below the line. January also recorded a hammer candlestick, a potential bullish reversal signal.

The longer-term technical signals will need February confirmation and sterling remains vulnerable to the broadly stronger dollar but there might be scope for a pause in GBP/USD's downtrend this month or even a partial retracement of the 1.3434-1.2100 September-January drop.

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