Head and Shoulders in Play: Will GBP/CAD Confirm the Sell Signal?
17 March 2025
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:
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The neckline of the head and shoulders pattern, previously broken and marked with green, is acting as a resistance level.
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The rectangle formation is forming below the neckline, making the breakout direction crucial for future price action.
Trading Scenarios:
Bullish Breakout:
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A breakout above the rectangle would indicate a false breakdown of the head and shoulders pattern.
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This would also mean reclaiming the neckline, which would invalidate the bearish setup and act as a strong buy signal.
Bearish Confirmation:
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A breakout below the rectangle would confirm the validity of the head and shoulders formation.
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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.