Head and Shoulders in Play: Will GBP/CAD Confirm the Sell Signal?

GBP/CAD is currently trading sideways within an orange rectangle, signaling consolidation. The broader technical setup is a head and shoulders pattern, marked with blue lines, which suggests a potential bearish continuation.

Key Levels to Watch:

• The neckline of the head and shoulders pattern, previously broken and marked with green, is acting as a resistance level.
• The rectangle formation is forming below the neckline, making the breakout direction crucial for future price action.

Trading Scenarios:
Bullish Breakout:

• A breakout above the rectangle would indicate a false breakdown of the head and shoulders pattern.
• This would also mean reclaiming the neckline, which would invalidate the bearish setup and act as a strong buy signal.

Bearish Confirmation:

• A breakout below the rectangle would confirm the validity of the head and shoulders formation.
• This would be a confirmation of the sell signal, triggering a strong move to the downside.

Conclusion:
GBP/CAD is at a crucial technical juncture, with both bullish and bearish scenarios possible. The direction of the breakout will determine the next major move, making this a high-stakes setup for traders.

Source: https://www.axiory.com/analytics/technical-analysis/head-and-shoulders-in-play-will-gbp-cad-confirm-th