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Post of the Day: USD/JPY
Monday, 13 October 2008 05:35:00 GMT  |  Richard Krivo, Power Course Instructor
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Student’s Question:

Is this trade ok? It looks like the price reached a new high at a triple top resistance level, yet the MACD did not reach a new high. This would indicate a reversal in the market.

10 12 08

Power Course Instructor’s Response:

Yes. This would be a good example of divergence but not a triple top.

Price is making a new high and MACD is not. Given this divergent indication, we would expect that price action would begin to become bearish. And, based on the chart you posted, it does. Good work...

This would not be a triple top however. For that to occur, we would want to see price hit the same level three times after distinctly pulling away from that same level each time.

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