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Divergence

AUD/USD: Short Setup to 0.6450This trade idea is rooted in a data-driven approach, leveraging a rare asymmetry in the economic calendar and specific quantitative models to identify a high-clarity opportunity. 📊 The Thesis by the Numbers My model assigns clear probabilities to the potential scenarios for this week, based on the scheduled U.S. data releases. 60% Probability: Base Case (USD Strength). Triggered by a U.S. Core CPI reading at or above 0.3% MoM. 30% Probability: Alternative Case (USD Weakness). 10% Probability: Wildcard Scenario (Risk-On Rally). 🧠 The Data-Driven Rationale This setup scored a -5 on my quantitative thesis model, indicating a strong bearish conviction. The core of this is the one-sided event risk. With Australia's calendar completely empty, the AUD is a sitting duck. Meanwhile, a volley of tier-one U.S. data (CPI, PPI, Retail Sales) is expected to confirm a robust economy. This fundamental divergence, combined with a technical picture of price coiling below long-term resistance, creates the conditions for a catalyst-driven drop. ⛓️ Intermarket & Statistical Edge Further analysis of market correlations and forward-looking models reinforces the bearish bias. 🌐 Correlations: The positive correlation of AUD/USD with equities (SPY: +0.31) suggests that a strong USD report, which could pressure stocks, would create a direct headwind for the Aussie. 🎲 Monte Carlo Simulation: While the mean outcome is neutral, the model's 5th percentile for price is down at 0.6503 , highlighting the statistical risk of a significant downside move if the catalyst fires. ✅ The Trade Setup 📉 Bias: Bearish / Short 👉 Entry: Watch for a bearish reversal pattern on the 1H or 4H chart within the $0.6550 resistance zone. ⛔️ Stop Loss: A decisive daily close above the 0.6622 resistance level. 🎯 Target: 0.6458 (June low-day close). Good luck, and trade safe.
Short
by MaxellAguiran
GBP/USD: Path to 1.3200 on Policy DivergenceThis trade idea outlines a high-conviction bearish thesis for GBP/USD. The core of this analysis is a significant and growing divergence between the fundamental outlooks of the UK and US economies, which is now being confirmed by a bearish technical structure. We anticipate the upcoming UK economic data releases during the week of July 14-18 to act as a catalyst for the next leg down. The Fundamental Why 📰 The primary driver for this trade is the widening policy and economic divergence. The UK is facing a triad of headwinds while the US economy exhibits greater resilience. This fundamental imbalance favors the US Dollar and is expected to intensify. Dovish Bank of England: The BoE is clearly signaling a dovish pivot towards monetary easing in response to a weakening labor market and sluggish growth prospects. This contrasts with the Federal Reserve's more patient, data-dependent stance. Widening Rate Differentials: The divergence in central bank policy is leading to a widening interest rate differential that favors the US Dollar. Geopolitical Headwinds: Fiscal policy from the new UK government and ongoing trade tensions are creating additional headwinds for the Pound. The Technical Picture 📊 Price action provides strong confirmation of the bearish fundamental thesis, showing a clear loss of upward momentum and the formation of a new downtrend. 📉 Death Cross: The 50-day moving average has crossed below the 200-day moving average, forming a "death cross," which is a strong bearish indicator. 📉 Key Level Lost: The price has recently broken and is holding below the critical 200-day moving average, a classic bearish signal. 📉 Bearish Momentum: Both the RSI (below 50) and the MACD (below its signal line and zero) indicate that bearish momentum is in control. The Trade Setup 📉 👉 Entry: 1.3540 - 1.3610 🎯 Take Profit: 1.3200 ⛔️ Stop Loss: 1.3665
Short
by MaxellAguiran
A New Chapter Begins with EURUSD’s ABC Wave Formation!🎯 Hey Guys, I’ve prepared a fresh EURUSD analysis for you. The market has shifted direction, and an ABC wave structure has emerged. I’ve placed a Buy Limit order based on my entry level. Below, you’ll find my detailed target zones and entry specifics: 🟩 Buy Limit Order: 1.17197 🟥 Stop Loss: 1.16903 📌 Targets: 🔹 TP1: 1.17344 🔹 TP2: 1.17538 🔹 TP3: 1.17869 📊 Risk/Reward Ratio: 2.27 Your likes and support are what keep me motivated to share these analyses consistently. Huge thanks to everyone who shows love and appreciation! 🙏
Long
by TraderTilki
1
EUR/USD: A High-Probability Short Setup at 1.1829At its core, this trade is driven by a powerful and growing divergence between the US and European economies. While technicals tell us where to trade, fundamentals tell us why we're trading. 1️⃣ The Interest Rate Gap: The U.S. currently offers significantly higher interest rates (4.25% - 4.50%) compared to the Eurozone (2.15%). This makes holding the US Dollar more attractive, creating natural downward pressure on the EUR/USD. 2️⃣ Central Bank Policy: The US Federal Reserve remains hawkish, focused on strength and fighting inflation. Meanwhile, the European Central Bank is dovish, signaling a willingness to keep conditions loose to support a weaker economy. 3️⃣ Labor Market Strength: The US enjoys a robust labor market with unemployment at just 4.1%, while the Eurozone's is significantly higher at 6.3%. This points to a stronger US economy. In simple terms, the US economy is strong, and its central bank is acting like it. The Eurozone economy is weaker, and its central bank is acting accordingly. This fundamental imbalance is the fuel for a potential significant move down in EUR/USD. The Technical Picture: The Wall at 1.1829 As you can see on the 4H chart, the price has run into a major wall of resistance at the 52-week high of 1.1829 . After a long uptrend, the momentum has stalled, and the price is now consolidating inside a symmetrical triangle . This coiling of price action often precedes a strong breakout. Our strategy is not to guess the breakout, but to act on a high-probability retest of resistance. We are looking to enter a short position as the price pulls back towards the upper boundary of this triangle, anticipating a failure at resistance and a subsequent break to the downside. The Actionable Trade Plan This setup offers an excellent risk/reward profile. 📉 Asset: EUR/USD 👉 Entry (Limit Sell): 1.1780 ⛔️ Stop Loss: 1.1850 🎯 Take Profit: 1.1600 📈 Risk/Reward Ratio: ~2.57:1 Trade safe and manage your risk.
Short
by MaxellAguiran
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