The USD is trending downwards following the announcement that more QE may be on the cards. I had breakouts on Friday against the EUR, GBP and SGD. I am reluctant to trade against the EUR because I am already long EUR/GBP, and I am cautious of USD/SGD because the Singaporean central bank regularly intervenes in the currency (it seems to be letting the currency band go at the moment, but I have no idea whether this will last — should have traded early when the band was broken). That leaves GBP/USD, and the trade has the advantage of hedging my EUR/GBP position against a spurt in the GBP. If EUR keeps strengthening and USD keeps weakening I should make money on both trades, GBP having been basically flat for a while.

Technically there is a major resistance level in the way of this trend at 1.60 (just beyond one risk unit of profit), but given the weakness of the USD it is not an unreasonable bet that this will get breached. The breakout was on high volume and with good thrust through to 5pm. Trading 10-day breakouts was the best strategy last time this market had a prolonged trend (shown in the charts; recently the lack of trend has made all long strategies very poor performers but breakouts have made money since the market turned around in May). Correlation with my other open trades is low, including with EUR/GBP, as developments in EUR and USD have driven the GBP in recent months. Stop is at 1 ATR.

With hindsight this was not a great trade — I went long GBP/USD after the USD broke out against a range of currencies. It would have been better to pick a currency that was in a tightening cycle rather than the GBP, where more QE is a possibility despite the high inflation numbers. In fairness, I did short USD against AUD as well.
I did make a little money on it, however, and it combined well with long EUR/GBP to make long EUR/USD, which was a good trade to be in. Also, when I went into the trade, everybody was talking about renewed EUR sovereign risk. I thought this was probably nonsense but was also cautious on having another long EUR trade in case I was wrong, but wanted to be short USD against another major currency and was already long the EUR — so GBP was the default. In that light, the trade was not so bad.
Today I closed out the trade after GBP broke out to the downside against a range of currencies. I have shorted GBP/NZD, which broke a major support level.