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Divergence

NZD/JPY: Bearish Wedge Before RBNZ CatalystThis is a high-conviction trade idea for NZD/JPY , where a perfect storm of technical and fundamental factors is aligning for a significant short opportunity. The setup is clean, the reasoning is strong, and we have a clear catalyst on the horizon. 🚀 Fundamental Analysis 🌪️ The macro picture is the primary driver here, creating a powerful bearish case. 1️⃣ Monetary Policy Divergence (🇳🇿 vs 🇯🇵): This is the core engine of the trade. The Reserve Bank of New Zealand (RBNZ) is dovish, signaling rate cuts amid a fragile domestic economy. In stark contrast, the Bank of Japan (BoJ) is hawkish, having started a historic policy normalization to combat persistent inflation. This fundamental clash is strongly bearish for NZD/JPY. 2️⃣ Risk-Off Catalyst (🇺🇸): The market is nervous ahead of the July 9th US tariff deadline . This uncertainty is creating a classic "risk-off" environment, which typically strengthens the safe-haven JPY and weakens risk-sensitive currencies like the NZD. 3️⃣ The RBNZ Decision (🏦): The main event on July 9. The market expects a "dovish hold," meaning even if rates are unchanged, the forward guidance will likely be very cautious, highlighting economic risks and signaling future cuts. This is the catalyst that could trigger the sell-off. Technical Analysis 📉 The 4H chart provides crystal-clear confirmation of the fundamental weakness. 1️⃣ Bearish Rising Wedge: Price is being squeezed into a classic bearish reversal pattern. This shows that buying pressure is exhausted, and the market is preparing for a move to the downside. 2️⃣ Key Resistance Zone: The wedge is pushing directly into a heavy supply zone between 87.80 and 88.00 . This area has acted as a firm brick wall 🧱, rejecting multiple attempts to move higher. 3️⃣ RSI Momentum: The RSI below the chart confirms the weakening momentum. It's failing to show strong bullish power, which supports the price action and signals that the uptrend is running out of steam. 💨 The Trade Plan 🎯 Based on this analysis, the plan is to enter with a limit order to get an optimal entry price on a potential final spike into resistance. Direction: Short (Sell) 📉 Order Type: Limit Sell Entry: 87.80 📍 Stop Loss: 88.40 🛡️ Take Profit: 86.00 💰 Risk/Reward Ratio: 1:3 ⭐⭐⭐ This setup presents a rare confluence of fundamental divergence, technical weakness, and a clear catalyst. Trade safe and manage your risk.
Short
by MaxellAguiran
AUD/JPY: Rejection at Key ResistanceThis is a high-conviction short setup on AUD/JPY based on a powerful rejection pattern that has formed on the 4-hour chart. As you can see, the price spiked into the critical resistance zone between 95.00 and 95.55 but was immediately and forcefully rejected, leaving behind a long "Exhaustion Spike." This is a classic sign of buyer exhaustion and seller dominance. It tells us that despite the recent rally, there is significant supply waiting at these higher levels. This price action provides a clear opportunity to short the pair in anticipation of a significant move down. 🏦 Fundamental Analysis The fundamental backdrop provides a strong tailwind for this trade, with two key drivers: 1️⃣ Central Bank Divergence: The Reserve Bank of Australia (RBA) is in an easing cycle, having recently cut rates to 3.85% with more cuts expected. In stark contrast, the Bank of Japan (BoJ) is on a path of normalization, having already raised its rate to 0.50%. This divergence in monetary policy is structurally bearish for AUD/JPY. 2️⃣ Imminent Catalysts: This week is packed with event risk that is skewed to the downside for this pair. We have the RBA interest rate decision on Tuesday, July 8th , and the U.S. tariff deadline on Wednesday, July 9th . A dovish RBA or a "risk-off" move from the tariff news would likely accelerate the decline in AUD (a risk currency) and strengthen the JPY (a safe-haven currency). 📊 Technical Analysis The price action on the chart confirms the bearish bias: 1️⃣ 4-Hour Rejection: The "Exhaustion Spike" at the 95.00 - 95.55 supply zone is the primary signal. It shows a clear failure by buyers and a strong takeover by sellers at a key level. 2️⃣ Long-Term Trend: On the daily chart, the price is trading below the critical 200-day moving average , confirming the long-term trend remains bearish. 3️⃣ Waning Momentum: There is a clear bearish divergence on the daily RSI. The price made a higher high, but the momentum indicator made a lower high, signaling that the rally is internally weak and losing steam. 📋 Trading Setup This is a swing trade designed to capture a significant correction with a simple "set and forget" plan. 📉 Direction: SHORT / SELL 👉 Entry: Sell Limit @ 94.85 ⛔️ Stop Loss: 95.60 🎯 Take Profit: 91.10 💡 Rationale: The entry is placed strategically to capitalize on a potential retest of the rejection area. The stop loss is placed safely above the rejection wick and the major resistance zone. The take profit targets the major structural support from the May 2025 lows, offering an excellent risk-to-reward ratio.
Short
by MaxellAguiran
1
SP500 - Cycle Analysis; New V-Bottom24 Dec 2018 - V-Bottom Trough: This marks a clean V-bottom. Both the 227-ROC and 114-ROC showed simultaneous positive acceleration after price reacing its low. Shortly after, both crossed their 57-SMA almost in sync — increasing the probability of a sustained bullish move. Price confirmed this by breaking resistance and forming a V pattern. This was further validated by the centered moving average crossover (114-CMA crossing above 227-CMA). 25 Mar 2020 - Deep COVID Crash Trough: During this phase the priced broke below the support, creating a deep trough. Altough both ROC lines initially showed strong negative acceleration due to the COVID-19 crash, they soon reversed above their 57-SMAs, signaling a major shift in momentum. This coincided with the price breaking above the key resistance which was also crossed in 2019 when confirming the old V-pattern. After this breakout, a brief pullback followed before the uptrend resumed with increasing strength. 22 Jun 2021 to 19 Dec 2023 - Pattern During the initial period a bearish divergence was visible in the ROC, nevertheless price and rate of change both declined making a low in early October 2022. A technical pattern began to form, which appears to align more closely with a symmetrical triangle; So when measuring its height and projecting it from the breakout point aligns with the new all-time highs that were reached on 27 June 2025. 21 Mar 2025 - New Cycle Trough A new V-bottom formed shortly after the current cycle began. Both ROC indicators had already crossed their SMAs to the upside, showing early signs of positive acceleration, days before of price broke through the resistance and reached the new record high. The 227-SMA is likely to cross from below the fast SMA while a possibility of a pullback increase. Following that, the 114-CMA will probably has the chance to cross back the 227-CMA, with the price potentially confirming a new support level and resuming its uptrend - in line with the broader cycle timeline.
CME_MINI:ES1!Long
by AFCapital21
US–Iran Conflict Triggers a Potential Nasdaq Bearish Setup🟣 Geopolitical Flashpoint Meets Technical Confluence The U.S. weekend airstrike on Iranian nuclear facilities has reignited geopolitical instability across the Middle East. While broader markets often absorb news cycles quickly, high-beta assets like Nasdaq futures (NQ) tend to react more dramatically—especially when uncertainty meets existing technical vulnerability. Monday’s session opened with a notable gap to the downside, reflecting immediate risk-off sentiment among futures traders. While the initial drop is being retraced intraday, historical patterns suggest that such gap-fills can often serve as ideal shorting zones—particularly when other bearish signals confirm the narrative. The backdrop is clear: this is no ordinary Monday open. 🟣 Bearish Divergence on CCI Builds the Case From a technical standpoint, the setup gains weight through a clear bearish divergence on the Commodity Channel Index (CCI) using a 20-period setting. While prices recently pushed higher, momentum failed to follow—an early indication that buyers may be running out of steam. This divergence appears just as price approaches the origin of Friday’s gap, a level that frequently acts as a resistance magnet in such contexts. This confluence of weakening momentum and overhead supply aligns perfectly with the geopolitical catalyst, offering traders a compelling argument for a potential reversal in the short term. 🟣 Gap Origin: The Line in the Sand The origin of the gap sits at 21844.75, a price level now acting as potential resistance. As the market attempts to climb back toward this zone, the likelihood of encountering institutional selling pressure increases. Gap origins often represent unfinished business—zones where prior bullish control was suddenly interrupted. In this case, the added layer of global tension only strengthens the conviction that sellers may look to reassert dominance here. If price action stalls or rejects at this zone, it could become the pivot point for a swift move lower, especially with bearish momentum already flashing caution signals. 🟣 Trade Plan and Reward-to-Risk Breakdown A potential short trade could be structured using 21844.75 as the entry point—precisely at the gap origin. A conservative stop placement would rest just above the most recent swing high at 22222.00, offering protection against a temporary squeeze. The downside target aligns with a prior UFO support area near 20288.75, where demand previously showed presence. This sets up a risk of 377.25 points versus a potential reward of 1556.00 points, resulting in a reward-to-risk ratio of 4.12:1. For traders seeking asymmetrical opportunity, this ratio stands out as a strong incentive to engage with discipline. 🟣 Futures Specs: Know What You’re Trading Traders should be aware of contract specifics before engaging. The E-mini Nasdaq-100 Futures (NQ) represent $20 per point, with a minimum tick of 0.25 worth $5.00. Typical margin requirements hover around $31,000, depending on the broker. For smaller accounts, the Micro Nasdaq-100 Futures (MNQ) offer 1/10th the exposure. Each point is worth $2, with a $0.50 tick value and much lower margins near $3,100. 🟣 Discipline First: Why Risk Management Matters Volatility driven by geopolitical events can deliver fast gains—but just as easily, fast losses. That’s why stop-loss orders are non-negotiable. Without one, traders expose themselves to unlimited downside, especially in leveraged instruments like futures. Equally critical is the precision of entry and exit levels. Acting too early or too late—even by a few points—can compromise an otherwise solid trade. Always size positions according to your account, and never let emotion override logic. Risk management isn’t a side-note—it’s the foundation that separates professionals from those who simply speculate. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com - This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CME_MINI:NQ1!Education
by traddictiv
BTC Short | FVG Setup + RSI Filter | 18.06 Smart Money Concept | Intraday Trade | 1:2 RR 🔍 The setup: Today I was watching for a short opportunity. Price reached a key level and formed a bearish FVG — looked clean at first. But I held off entering because I noticed RSI divergence — a red flag I always consider when expecting a potential level break. 💡 Why it matters: RSI divergence often signals weakness in momentum. For me, it's a key filter that helps avoid fake breaks — this was a good example of how I apply it. 📈 What happened next: Price moved up to test the 1H FVG (zone #2) and formed another FVG slightly lower. That second one was my entry point for the short. 🎯 Target: I exited at a 1:2 risk-reward, which is my minimum. The day was ending, and I didn’t want to hold the position longer — I’m not convinced the down move would continue cleanly (possible wicks or traps). 🤔 Question to the community: How do you filter FVG entries? Do you also use RSI or wait for structure shifts? And what’s your outlook on BTC from here?
Short
by SimonCryptoShmel
1
GBPUSD - Still Bullish - Dont trap your self ! Hi Guyz, welcome to other episode of analysis for GBPUSD. From our 1H chat, it is seen that as per DOW Theory, the market has broken the HL and it seems like market has entered into the bearish trend However, the catch is there is no divergence followed by the break of HL. It implies that market is taking a corrective move, which is 50 percent of FIB level. Thus, there is a formation of AB=CD harmonic pattern. we plan our entry on the break of "B" point and projected TP in our case is "D" point. stop loss is placed beneath HL as marked.
Long
by ProTradeProfessor
EURAUD - Bearish Trend to Start - Harmonic + Divergence ComboHello Friends, Market after making series of HH and HLs, have finally made a fantastic Bearish Divergence on 1H time frame which is clear sign of correction. Further market has almost completed AB=CD harmonic pattern, which is suggesting Potential Reversal Point as marked. these confluences suggest a bearish trend to start We are waiting for the neckline (HL) to break with a good candle and then we enter into the market with TP1 and TP2 with a R:R of 1:1 and 1:2 respectively. Further, place stoploss slightly above the HH.
Short
by ProTradeProfessor
MICROSOFT - Simple Analysis WIN ! Its Bearish Ahead ! MAGIC Microsoft - Lets explore the magic of Technical Analysis / Price action. Microsoft is currently testing the daily resistance level and it will be more matured once the bearish candle / rejection candle is formed. We see a bearish divergence at this level which is a strong confluence for the bearish trend a head. forgot to mention, a perfect bookish - Bearish Crab pattern is forming, which is a forming a Potential Reversal Zone (PRZ). we expect our entry after confirmation on the break of HL - 447 level and then we can plan our TPs accordingly. Please like and comment!
NASDAQ:MSFTShort
by ProTradeProfessor
GBPUSD: Potential Reversal After Strong RallyThe British Pound has shown strong gains against the US Dollar, approaching a key resistance area. After such an extended move, a correction or reversal would be a logical expectation. Technical Setup There is a clear series of bearish divergences on the CCI (14) indicator. Price is forming a narrowing rising wedge, which often signals trend exhaustion. Trade Plan Sell limit orders: 1.3690 and 1.3850 Market entry: Only after confirmation — either a trendline break or a moving average crossover Conclusion GBPUSD shows signs of weakening at the top. I remain focused on short setups from resistance areas, waiting for confirmation to act.
Short
by InvestWorld_777
1
As ECB Ready's "Final Cut", EJ "Begins Reversal"OANDA:EURJPY has began to potentially form a very strong Triple Reversal Pattern, The Head and Shoulders @ the Resistance Level lasted visited May 14th. I say "potentially" because the "Right Shoulder" or recent Lower High has been created but we still wait for the final decline to the "Neckline" or Support Area formed by the Lows separating the "Head" from the "Shoulders" or Higher High from the Lower Highs in the pattern! Signs of Potential Head & Shoulders: 1) Left Shoulder is an Oversold High 2) A Higher High is created at a level of Resistance 3) The Head not only has the Most Volume concentrated in the Pattern, but is also the start of the RSI Divergence from Price 4) Right Shoulder is formed and unable to surpass the Left Shoulder ..Bringing us to a very important tell.. 5) Volume Decreases and logs a 3rd Divergent High in the RSI @ the creation of the Right Shoulder Now we must WAIT for CONFIRMATION of the Pattern! This will come when Price: 1) Declines to the Neckline & 2) Makes Successful Breakout Once the Head & Shoulders is Confirmed and Breakout is Validated: - This could deliver great Short opportunities as a Head and Shoulders Breakout and Retest at the Neckline being the Last Line of Defense for the Bulls if Bears can push Price through and pick up Volume! Fundamentally, BOJ Governor Kazuo Ueda will be speaking on Tuesday, June 3rd where we could see volatility come in for JPY. The ECB is expected to cut rates by 25 bps from 2.4% to 2.15% on Thursday, June 5th and this could be the Last Cut we see the ECB plan to make until they see downside growth risks make more cuts likely.
Short
by Novi_Fibonacci
$US10Y and $DXY Divergence and correlation breakdownRecent weeks we might have missed some underlying churn in the market dynamics. Recently there has been a clear visible divergence in TVC:US10Y and TVC:DXY in midst of all the noise about the tariffs. Usually with rising TVC:US10Y yield the US Dollar index TVC:DXY rises with it as visible in the chart below. In this blog we have been following the downward slopping channel in the TVC:US10Y and the yield has remained within this tight range of the channel. In our last blog on 02 May 25 we called for a lower TVC:US10Y @ 4%. Seems that call was incorrect and I was wrong. But in this space, we have been asking for a lower $DXY. The TVC:DXY chart is making lower highs and lower lows and in a verge of a breakdown. So we have higher TVC:US10Y which is capped to the upside @ 4.6% visible from the upper end of the downward slopping channel and we have TVC:DXY making lower lows but the correlation is broken in the recent weeks as shown in the daily chart below. This kind of unpredictable market behavior it’s difficult to forecast equity market direction. TVC:US10Y seems to create headwind for equities but the lower TVC:DXY is good for risk assets like CRYPTOCAP:BTC , SP:SPX and $QQQ. Hence this push and pull will keep the markets range bound for now. Verdict : TVC:US10Y currently at top of the range, downside more likely ; TVC:DXY continues to struggle and in penalty box.
TVC:US10Y
by RabishankarBiswal
Gold Bulls Taking a Breather?Gold has been in an overall uptrend since late January, steadily climbing with strong bullish momentum. After peaking around $3,440 in early April, price pulled back and found support near $3,171, bouncing from that level and now approaching resistance around $3,300. Recently, price has shown signs of recovery, but the move still hasn’t broken the downtrend from the previous highs. The current area near $3,300–$3,365 is critical. If Gold can break and hold above this zone, it may retest the $3,440 high. But if price gets rejected again, a pullback toward $3,171 or even $2,972 is possible. Technical indicators are sending mixed signals. The RSI is around 57, showing moderate bullish strength, but not overbought. However, the Stochastic is in overbought territory with a bearish crossover forming, which could mean a short-term dip is coming. Gold is still trading above all major moving averages, which supports a longer-term bullish outlook. The bigger picture favors bulls, especially because of recent economic and geopolitical news. The U.S. Dollar has weakened after Moody’s downgraded the U.S. credit rating and concerns grew over a massive new tax-cut bill. Tensions between the U.S. and China, as well as ongoing conflicts in Gaza and Ukraine, have also driven safe-haven demand. Meanwhile, traders are betting on potential rate cuts later in 2025, which tends to boost Gold. Key levels to watch: Resistance: $3,300 and $3,440 Support: $3,171 and $2,972 Bias Summary: Upward Bias: Weak USD, rising geopolitical risk, safe-haven demand, Fed rate cut expectations, price above major moving averages, aggressive central bank buying Neutral Bias: RSI mid-range, price near resistance Downward Bias: Stochastic overbought with bearish crossover, potential lower high formation, hidden bearish divergence. Overall Bias: Bullish Long-term, Bearish potential short term – Fundamentals support further upside, but caution is needed near resistance for retracements.
TVC:GOLDLong
by Jacques1000
2
$SPY – Bearish RSI Divergence + Gap Below = Risky Setup👀 The RSI divergence has been signaling weakness for several sessions — with lower highs on momentum while price made higher highs. And now, we’re stalling right at a volume shelf (see VRVP) with a big unfilled gap looming just below. ⚠️ Things to watch: Bearish RSI divergence ✔️ Price breakdown confirmation below $582 Gap fill target = ~$572 VRVP shows thin volume beneath current price If momentum rolls over from here, this could accelerate fast into that gap zone.
AMEX:SPY
by SmartSignalss