Friday, January 19, 2018

A RSI Divergence On The H4 GBP/USD Time Frame Is A Signal For A Drop

GBP/USD reached the resistance zone around 1.3950, which I mentioned in my last analysis of this pair, and when that happened a RSI divergence formed between three highs of the indicator compared to the pair’s chart movement.

The possible drop that this divergence is a signal for could reach 1.3550.

On the larger time frames, however, there is no signal that the pair’s rally is over, so for now we can only expect a corrective depreciation, after which GBP/USD could keep moving north to 1.4050 – 1.4100.

In my opinion a further deepening of the depreciation is not very likely, at least for the moment.
We should also observe the trend lines of the RSI divergence. In case there is a breakout to the upside that would mean a renewal of the rally without reaching the limit of the divergence.