Some of the best technicians I know totally dismiss divergences as consistent signs of major turning points. Therefor, I don’t pay all that much attention to them.
But this time, I note that there is a pronounced divergence in RSI on the daily charts as EUR/USD slumps to a new low for the downtrend.
Why is this divergence so important?
Because the last major divergence came earlier this month when EUR/USD surged to a fresh trend high at 1.4283 but RSI failed to make a new high by a mile…
Since I have a short attention span (like most forex traders) I note what happened last and assume it will happen in the future.
Is that a successful strategy, you ask?
Hell, no! But it gives us something to prattle on about while trying to look smart while leaning up against the bar…
