Today is the first Friday of the month where US Non Farm Payroll is the most awaited Forex news of the day. EURJPY at the 5th July 2013 move up at the morning and MACD Histogram shows a bearish divergence. It's a good trade setup before the NFP news announced.
As you see, EURJPY on M15 time frame has made 2 significant high but the MACD Histogram show lower high. This is a divergence condition which is indicating the bullish power is getting weaker. Draw a trend line connecting lows and when the price break this line, we go short. EURJPY fall about 80 pips after this divergence.
I will keep learning this kind of divergence. Divergence is actually easy to be spotted but how to trade this divergence is one more important thing. A trend line break out is good but sometimes, the trendline also failed. Stop loss should be used on any position we take.
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