Charts point to pound at $2.10

By Toni Vorobyova

LONDON (Reuters) - Expectations of more UK interest rate increases have propelled sterling to 26-year highs above $2.05 and technical charts suggest scope for further gains towards $2.10, even if there is a consolidation pause first.

Sterling was last at such lofty levels in 1981, the year Roger Moore played James Bond in "For Your Eyes Only", and U.S. President Ronald Reagan and Pope John Paul II both survived assassination attempts.

In the currency markets, 1981 marked a 25 percent slump in sterling from above $2.40 to below $1.90.

For technical analysts, the speed of that move and the fact that it happened so long ago means historical chart levels are of less meaning than usual when trying to predict future currency moves.

Instead, many are focusing on drawing trendlines up from recent levels to determine where the pound might stumble on its seemingly one-way move higher.

Resistance targets would appear to start coming in around $2.06 and above, technical analysts said.

"Cable has been traded in a very neat channel since May last year and the top of that channel comes in between $2.08 and $2.10," said Nicole Elliott, technical analyst at Mizuho Corporate Bank, adding that sterling could first experience a phase of consolidation around the $2 mark.

Max McKegg at TRL expects sterling to extend the rally to $2.10 and even $2.15 sooner, "over coming weeks".