Glossary · Indicators

Divergence

A disagreement between price and an oscillator — such as a higher high in price with a lower high in RSI — hinting that momentum is fading.

By Sky Trade editorial teamUpdated November 5, 2026

Divergence happens when price and a momentum indicator tell different stories. The two classic types:

Bearish divergence: price makes a higher high, the indicator a lower high — the rally reaches further on less force.
Bullish divergence: price makes a lower low, the indicator a higher low.

Some traders also use hidden divergence (a higher low in price with a lower low in the indicator, or the reverse) as a sign that a trend may continue.

Divergence is popular because it seems to anticipate turns. In practice it is a warning, not a timing tool. Momentum can fade for a long time while price keeps trending, producing two, three or four divergences in a row before anything happens — and sometimes nothing does. Divergences are also easy to see in hindsight and much harder to confirm live, because the second peak isn't complete until the candles after it have formed.

The usual approach is to wait for something else — a break of structure, a candlestick pattern at a level — before acting. Divergence works with RSI, MACD, Stochastic and other oscillators. See RSI explained and MACD explained.

Example

EUR/USD rises to a new high at 1.0928 while RSI(14) peaks at 64, against 71 at the previous high. That is bearish divergence, yet price still pushes on to 1.0940 before turning.

Learn more in the academy

Related terms

Practise first, then decide

Every Sky Trade account comes with a $10,000 demo balance on the same prices and payouts as the real account. Create an account or read how the demo works.

Create an account About the demo account