Just about 5 weeks ago, while discusing the GBP/USD outlook, I pointed out that a leading bank was calling a head-and-shoulders top in the Pound, and they had gone short at 1.6133 with a stop at 1.6305. From an Elliott Wave Principle point of view, it did not seem right. By the evening of 23rd June, I was kicking myself for having stuck my own neck out on this matter, because clealy the GBP/USD has broken its neckline and going down rapidly. By 12th July, it had reached a low of 1.5780. Well, in the long run, everyone is right. But many of us also die! The GBP has come roaring back, vindicating the view that what finished there was not a head-and-shoulders formation, but some other beast. Who cares now, anyway. SOme of us have lost money on other trades in the meanwhile, right? However, there is a lesson for you here. Far too often, analysts tend to label a formation as a head and shoulders top, and how nice it would be if they applied some Elliott Wave brush on that picture.. maybe a different image will show up!
GBP/USD outlook: In the long run, we are dead
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