Example of Divergence - USDJPY

In a forex chart, one expect the price on the chart and the value of the indicator to move in same direction. Well, sometimes the price and the indicator may show different movements.

For example :

On This Chart : The price movement on the main chart is clearly falling as the price keeps forming lower lows.
Indicator Window : The indicator window(RSI in this case, any oscillator may be used) is moving upwards as it keep having higher highs as compared to the main chart.

This is known as DIVERGENCE and in many cases I have seen, the price corrects after it's occurance. It helps keeping any eye on such.

Please do your own analysis before placing any trades.

Cheers and happy trading !!!!