After rallying for nine straight trading days, the GBP/USD has finally pulled back. The extremeness of the recent move in the currency made it prime for a correction.

Typically when moves become this overextended, a correction of at least 100 pips is possible in the GBP/USD and that is what we have seen today. However, the sell-off today has formed what could be a very early right shoulder in the GBP/USD. Take a look at the following chart and tell me if you see a Head and Shoulders pattern forming.

 

Kathy Lien is Director of Currency Research at GFT, and runs KathyLien.com.