Four currency pairs showed divergence signals the week of July 12-16: GBP/AUD, EUR/GBP, OZM, and GBP/CHF. The presenter maps price action, support and resistance zones, and momentum indicator signals into specific trade setups with entry points, stops, and targets. Risk management includes splitting position size to preserve capital for a second entry if the first fails.
Chapters
Hello everyone and welcome to another Divergence University weekly summary. Today we are going to talk about, uh, the interesting setups and examples, of course, at least according to us. When it comes to divergences for the week of July 12th up until the 16th, that gives us just a few right from here to here. So let's go ahead and cover them quickly. And of course, as usual, if you have any questions, do not hesitate to contact us here, YouTube, whatever it is, right? It doesn't matter which social media or social channel you're using. We're there for you to help you understand what we're doing. So pound Aussie, well, this one is kind of interesting because it all starts and ends with a level. So actually, the first thing we want to see here is that the price is pushing to the upside. The price is breaking above levels, and this level became an interesting support zone. On top of that, it looks like the price is now stuck in a range after this bullish move, and we're likely going to continue higher. Especially makes, uh, of course it makes sense to go ahead and check out the higher time frames, right? But for the sake of these examples, we are going and covering only one single time frame. So that being said, we know we're Right at the bottom of the range here. Now, it would have been better if the price comes and tests this specific zone before buying, because now if it does and we have a stop loss right over here, that becomes a risky trade. Of course, the risk-reward ratio now agrees that we're going to be taking profits before the top— sorry, not before, below the top. Because if we go ahead and push the stop loss down to here, actually, sorry, below this low, then the situation changes dramatically. Okay, we're adding like 40% more in terms of pips, which would be giving us target somewhere above this high, and this is not good. So here we have a few, at least the way I see it, you have a few options. Either take this trade aggressively But use less risk, okay? Using less risk usually means we're splitting the usual lot size into parts. So let's say I'm using money or fixed lot, doesn't matter. If I'm using $10 or 1 lot, right, I'm gonna split it into 2 parts, which means I'm gonna be risking $5 here or 0.5 lots. And if the trade loses, I will have the second portion for a second attack right here, which is 0.5 again, or $5, whatever, right? Just splitting the risk into parts, whatever your risk is. Okay. The other option, of course, is to not trade it and simply wait for this thing to come lower. If it doesn't, you miss the opportunity. If it does, then you're probably making much better returns. So that's about this one. Then we have EUR/GBP. Now for EUR/GBP, we have kind of classical situation here where the thing starts to move down. Uh, here we can also go ahead and draw channels, and we're somewhere closer to that daily channel, but in general This move started showing divergences. This is the first time. Then we have false convergence on the MAs and the histogram continues to show divergences. Beautiful spikes. We can see how clear that zone was drawn here with the closing and opening prices, and then we have these spikes below it. But this is something interesting. Then we have breakout above this zone and the spike. So possible attempts for bullish attacks here, uh, in my opportunity start to make sense. Then we have euro pound. I think this is the first attempt, right? This is actually vice versa, but we're looking at that zone now. For this zone, well, you already kind of know how it will develop further. But this is what we have up until that moment. We have this, which I can't really say this is a completed structure, but, but, um, if we're going to be moving lower and this is supposed to be wave number 4 and then continuation, and we start getting divergences plus a massive level, the least I would be expecting is for the price to create some kind of ABC now or consolidation. If we're going in this direction, having the target right here makes a lot of sense. This is the level, right? The protection could have been slightly more aggressive in order to push the target also a bit lower, but then you're not going to actually cover— I'm sorry, we cannot really see it, but you have spikes here, right? And this time the spikes are kind of protected and we gave it a bit more room, but otherwise the idea doesn't look bad at all. And you can see that if you're going for 1:1, a bit more, you know, too many extra ifs, overall we got the push up. So this idea wasn't totally wrong, this is what I'm trying to say. The assumptions here were not totally wrong. OZM, looking for possible sell opportunities. Well, it's kind of obvious and clear what's happening. That's the breakout zone, right? Well, maybe these levels as well, but overall that was the zone where the price was stopping and then we got the breakout, which means pullbacks were selling, were very close to this level. And again, there are millions of ways of how you can be treating this opportunity. You can be selling first, second false break, false convergence once again, looking for sells, aggressive protection. You can be protecting this level right here, right? Plus this too. You can be protecting this zone right there. Again, million, million of ways to handle it. But the idea, the fundamental idea here is that you got the breakout, you got the pullback, you're looking at divergences, you would be expecting for the price to continue lower, right? After we have reached this zone and this level, this is already June, July. Was I talking about different setups? I hope I didn't tell you no. Pound franc, this is the last one, right? Pound franc, and then we have— this is from 7th. All right, let's cover this one last time, one last trade example, and we're done. Uh, pound franc, again, a bit of a How do you call it, like zigzag structure here, a bit of range. Maybe we can go ahead and draw channel lines, but it's overall not moving like this in a straight move to some other direction. What we have here though is an attempt for the price to go in the opposite direction after the news, right? At least if I don't Uh, I recall that correctly. Excuse me, but I'm pretty sure we had news here. Anyhow, the idea was that this level, which is a massive level, was broken. Naturally, the price comes after that retesting it, especially after news. This is very common situation after this one-wave moves, right? You get kind of V pattern, and then we're looking for continuation down and sells. Super, super, super simple idea. Nothing more than that. All right, so that would be all for this week. Of course, if you have again any questions, let us know and we'll get back to you as soon as possible. Have a good one.
