There’s currently a beautiful head and shoulders pattern on the Cable. The formation is already active as the price has broken the neckline. It’s even been tested as a resistance. As long as we stay below 1.408, the sentiment is negative and we should see a further drop.
EURCAD also has a head and shoulders formation, but the thing is that we haven’t broken the neckline yet. This is what sellers are expecting and hoping for now. A breakout of the neckline would be a strong signal to go short with a nice risk-to-reward ratio. The target for this slide is more than 500 pips lower. Tempting, huh?
Since mid-January, the EURUSD pair has been locked inside of the range between 1.218 and 1.254 (orange). We are awaiting a breakout, which could potentially bring us a very lucrative movement. The situation is only really interesting for patient traders as it looks like we will have to wait a while for this breakout.