GBP/USD Showing Regular Bearish Divergence On H1, H4 And D1 Timeframes!

As a technical trader, one of the most strong trend reversal patterns is the appearance of the Regular Divergence Pattern. When a regular divergence pattern appears, it is a strong leading signal for a trend change. This is precisely what has happened on the H1, H4 and D1 charts of GBP/USD pair just one day after the FOMC Meeting. First watch this video below that giving the GBP/USD outlook for June 21st 2012.

Now here is our outlook for the GBPUSD pair for the next few days. The H1 timeframe is showing Regular Bearish Divergence.

GBP/USD Outlook June 21st 2012

If you look at the above chart, you will find MACD and the Stochastic Oscillator showing Regular Bearish Divergence. Now this can be a retracement if it is not supported by the appearance of the Regular Bearish Divergence Pattern on the H4 and the D1 timeframe. If you take a look at the H4 chart of GBP/USD below, you will find Regular Bearish Divergence Pattern being shown by the MACD, Stochastic and the RSI oscillators.

GBP/USD Outlook June 21st 2012

Now if you take a look at the D1 chart of GBP/USD you will once again find Regular Bearish Divergence Pattern appearing.

GBP/USD Outlook June 21st 2012

What this means is that the downtrend in GBP/USD is being confirmed by the three timeframes and it can continue for some days. When you find a bullish divergence pattern appearing on the D1 timeframe, till then you can take this pair to be bearish. If the appearance of a bullish divergence pattern on the H1 timeframe is not supported by the appearance of a bullish divergence pattern on H4 timeframe, you can take it as a retracement. If you want to go short, place the stop loss close to the last significant high and go for a profit target of 80-100 pips on the H1 timeframe. Or another strategy can be stay in the trade as long as a bullish divergence pattern does not appear on the H1 timeframe. Whatever suits you. If both the divergence patterns on H1 and H4 timeframe are bearish, it means you can go for a bigger profit target.

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