Cable fights on a key support

GBPUSD is currently finishing a head and shoulders pattern (grey) that started on the first day of December. It may not be the prettiest one, as the right shoulder is not properly formed, but still, the principle is saved. What is interesting here is that the neckline of this formation (yellow) is currently in the same place as the long-term up trendline (red). A breakout of the two will definitely be a legitimate sell signal.

Should that happen, the first target is the 23.6% Fibonacci (orange) and, in case of a breakout, the chances that of getting there are huge. The next target is on the 38,2% Fibo but that should not concern us at the moment.

Remember that prices have not broken the neckline and the up trendline yet! We are close but still above the key supports. Buyers have yet a chance to initiate a reversal and if that happens, we will get a proper, mid-term buy signal. In my opinion, chances for a bearish scenario are currently slightly more probable.