Divergence

Divergence in forex is when price and a momentum indicator such as RSI move in different directions, for example price making a higher high while the indicator makes a lower high.

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Last updated 27 October 2026

Divergence in forex is when price and a momentum indicator, such as RSI or MACD, disagree: price makes a new high or low, but the indicator does not. It describes a move that happened with less force behind it than the one before. MetaTrader 5's RSI help lists divergence as a popular method of reading the indicator.

Traders read it as an early sign of a weakening move and wait for price to confirm a turn, for example by breaking the last swing.

What are the main types of divergence?

The two main types are bearish divergence, where price makes a higher high but the indicator a lower high, and bullish divergence, the mirror case at lows. Bearish divergence describes a rise with weaker momentum. Bullish divergence describes a fall with weaker momentum, where price makes a lower low and the indicator a higher low.

Type Price Indicator What it describes
Bearish divergence Higher high Lower high A rise with weaker momentum
Bullish divergence Lower low Higher low A fall with weaker momentum

Some traders also use "hidden divergence" for the reverse case (for example, price making a higher low while the indicator makes a lower low). Definitions of that term vary between sources.

Worked example: divergence on GBPUSD with RSI

Point Price low RSI(14) at that low
First low 1.2600 28
Second low 1.2570 34

Price made a lower low (30 pips lower), but RSI made a higher low, so this is bullish divergence. In this example price then fell further, to 1.2540, before rising. At 0.10 lot, about $1 per pip, a long position opened at the second low (1.2570) would have been about $30 down at 1.2540, and about $30 up if price had instead risen to 1.2600. Traders set that exposure with position size and a stop-loss placed beyond the low.

Price makes a lower low while RSI below it makes a higher low, at 28 and then 34, with dashed lines joining the two lows in each panel to show them sloping in opposite directions
Bullish divergence: price makes a lower low while RSI makes a higher low, so the fall had less momentum.

Where else does divergence appear?

Divergence appears with any momentum indicator, including MACD and the stochastic oscillator, not only RSI. The MACD lesson covers MACD divergence, and the stochastic oscillator can be read the same way. The main walk-through, with a chart, is in the RSI and stochastic lesson.

How do traders read divergence?

Traders read divergence as weakening momentum and wait for price to confirm a turn, usually with a break of the last swing. They compare each price high or low with the indicator reading on the same candle and keep one indicator setting, so the comparison means the same thing every time.

How do you spot divergence in MetaTrader 5?

MetaTrader 5 does not mark divergence, so you compare the slopes yourself with trend lines on price and on the indicator. Add RSI or MACD from Insert, Indicators, then draw a trend line across two price highs or lows, and another across the matching indicator readings, to compare their slopes.

Does divergence mean the trend will reverse?

No: divergence means momentum has weakened, and a reversal is only confirmed when price closes beyond the last swing. Weaker momentum and a change of direction are different things. A trend can keep going while divergence builds, so traders wait for price itself to break the last swing high or low before calling a turn.

Sources

Learn it properly in the full lesson: RSI: What the Relative Strength Index Shows, Plus Stochastic

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