Bearish Divergence

A bearish divergence is seen at a market top. An example would be the Dow Jones Industrial Average going to a new high, but the S&P 500 failing to reach a new high. That’s a bearish divergence.

A bearish divergence can also be seen between price and an indicator. For example, EURUSD makes a new high, but RSI fails to reach a new high. That’s also a bearish divergence, and it’s a signal that prices may be resistant to further advances.