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I have been using this GBP basket made up of the NZD,AUD,USD,EUR and JPY to guide my trades with the GBP this year. It has been very successful, it does mean I have to take 5 trades every time which needs a bit of careful risk management. Stops are also difficult so I tend to trade without stops and look to make a decision at the end of day.

The basket has now come up against the all time low from 2012 and it has developed into a flat bottomed triangle, MACD has just crossed negative and RSI is trending lower but not yet oversold. A break here could develop into a meaningful move lower.
Is it not a bull flag? RSI oversold? MACD can turn every hour to be positive?
vDr78 vDr78
Look RSI divergence- hidden bulls
Hi vDr78, thanks for the two comments but I must disagree with your thoughts. A bull flag would be a rising channel within a larger bearish move, there is one in the chart around May earlier this year but not at present. MACD is based on two moving averages and on the daily chart they will take many days to turn positive they can not change each hour.
RSI divergence would require a rising trend in RSI which is not present. Most of all I woul caution against the idea of 'hidden Bulls' the whole concept of technical analysis is that nothing is hidden you can see the entire market and what it is thinking, if themarket was dominated by bulls price would be rising.
vDr78 SteveTobin
Interesting. Thanks for sharing your idea
my next TP for GBOJPY is at 125
that is 600 pips which is quite a drop. I am short yen from 137 but only as part of this GBP basket trade, it is a synthetic construct but i trade it like a single currency
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