The first trading day of April brings our attention to a critical setup on the British Pound to US Dollar pair, commonly known as Cable. Monday’s price action reinforced a major technical level that could define the direction for this pair in the coming days or even weeks.
The level in question is 1.297, marked with a yellow horizontal line on the chart. This area has now been confirmed as a strong resistance zone. Its significance stems from its role as the neckline of an inverse head and shoulders formation, a classic bullish reversal pattern. The left shoulder, head, and right shoulder are all clearly outlined and marked with orange rectangles, and the pattern has been developing steadily over recent weeks.
Monday’s session saw a test of this neckline, but the price failed to break above it. That rejection confirms the importance of this resistance and highlights the battle between buyers and sellers at this key juncture. As long as the price remains below the 1.297 level, the sentiment remains cautious, with a slight bearish tilt. Traders may continue to view this as a ceiling, leading to short-term selling pressure.
However, the potential for a bullish breakout remains on the table. A strong daily close above the 1.297 resistance would activate the inverse head and shoulders formation and generate a long-term buy signal for Cable, potentially opening the door to a more sustained rally.