FXstreet.com (Barcelona) - The Sterling continues advancing at a strong pace, taking advantage of Dollar weakens, and rebound at Oct 13 low at 1.5805 has extended on early European session to levels above 1.6125 to reach a fresh 3-week high at 1.6175.

In case of consolidating above 1.6125, next resistance levels could be located at 1.6200, and above here, 1.6375 (Late Aug/early Sept highs), and 1.6390 (Sept 24 high). On the downside, support levels lie at 1.6035/50, and below here, 1.6025 (Oct 14 high) and 1.5995 (intra-day low).

According to Nicole Elliott, senior technical analyst at Mizuho Corporate Bank, a daily close at current levels could turn momentum bullish: Rallying from first medium term Fibonacci retracement support (38%) US dollar weakness gains the edge over sterling weakness. This tussle should continue for several weeks making trading Cable more difficult than other currencies. A daily close above 1.6125 should turn momentum bullish.

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