I'm devising a new indicator system, that looks for price divergence. Indicator looks at absolute currency scores. Let me use EURUSD for my example.
Example: EUR has highest absolute currency score, USD lowest absolute currency score. Indicator signals a EUR continuation breakout on 5 pairs (including EURUSD), prices support signals on those same pairs, except EURUSD shows divergence and didn't gain as much (relative to indicator's signal).
Is this more likely to represent that continuation and price movement is imminent on EURUSD chart based on signal and strengths across all charts, or is it more likely a bearish reversal? Sorry if I'm being vague, still in theory stages of what I'm working on.
Example: EUR has highest absolute currency score, USD lowest absolute currency score. Indicator signals a EUR continuation breakout on 5 pairs (including EURUSD), prices support signals on those same pairs, except EURUSD shows divergence and didn't gain as much (relative to indicator's signal).
Is this more likely to represent that continuation and price movement is imminent on EURUSD chart based on signal and strengths across all charts, or is it more likely a bearish reversal? Sorry if I'm being vague, still in theory stages of what I'm working on.