* Sterling supported after Greek bailout deal boosts sentiment * Fresh gains lacking with strong resistance above $1.5900 * UK public sector finance data shows encouraging progress By Neal Armstrong LONDON, Feb 21 (Reuters) - Sterling was supported against the dollar and tracked the euro on Tuesday after euro zone finance ministers sealed a second Greek bailout deal which steadied risk sentiment, but gains were short-lived amid a fragile economic outlook in the UK. Euro zone finance ministers finally approved a second bailout for Greece that removes the threat of a disorderly default next month but is unlikely to solve the debt-laden country's economic woes. Sterling was close to flat for the day at $1.5830, after the sealing of the Greek deal allowed it to recover from Asian session lows of $1.5810. Resistance was the 200-day moving average at $1.5913, together with this month's high of $1.5929. "The Greek situation is clearly the main influence but sterling's done pretty well over recent weeks without too much justification and I can't see it breaking through $1.6000 against the dollar in the near-term," said Adrian Schmidt, currency strategist at Lloyds Banking Group. Traders also highlighted an option expiry at $1.5900 in decent size which they said could hamper any rallies into the 1500 GMT cut while demand was seen at $1.5810/00 with stops through $1.5780. "We would allow for the 200-day ma (moving average) to be challenged. Our favoured scenario is that we will see failure up here and slide back to $1.5645, last week's low," said Commerzbank analysts in a note. The euro was up slightly for the day at 83.65 pence having risen to 83.835 as details of the Greek deal emerged. Traders said a Swiss account was the main seller in early European trade, with offers reported at 84.00/10 and stop losses highlighted through 84.20. UK public sector finance data for January released on Tuesday showed the biggest monthly surplus in four years, with a net repayment excluding financial interventions of 7.75 billion pounds, better than forecasts of 6.3 billion pounds. "It's a good set of data. It means that it looks like we are heading for a full year financial improvement of around 18 billion pounds, said Ross Walker, economist at RBS. "We are still borrowing huge sums, but against a backdrop where we had Moody's negative outlook and there was growing talk about the UK's rating ... these numbers help." Ratings agency Moody's put the UK's prized triple-A sovereign rating on review for a possible downgrade earlier this month, keeping the pressure on Chancellor George Osborne to stick with strict austerity measures and avoid tax cuts at next month's UK budget. Sterling's recent moves have been dominated by developments in Greece and signs of improved UK data, including better-than-expected retail sales numbers. It may also take cues from the minutes of the Bank of England's latest monetary policy committee meeting, due on Wednesday. The MPC voted for another 50 billion pounds of asset purchases at its February meeting to try to stimulate the sluggish economy. Bank of England Deputy Governor Charlie Bean will give a speech at the Scottish Council for Development and Industry around 1930 GMT. (Editing by Ron Askew)

Source