Gold Classic Bullish Divergence & Gold Hidden Bullish Divergence

When it comes to bullish divergence there are 2 bullish divergence trading setups mainly traded in the xauusd market - these gold trading setups are; Gold Classic Bullish Divergence and Gold Trading Hidden Bullish Divergence.

XAUUSD Classic Bullish Divergence

Classic bullish divergence setup forms when price is forming lower lows ( LL ), but the oscillator is making higher lows (HL). The example illustrated and explained below shows a picture of this gold trading setup.

Gold Trading Classic Bullish Divergence - Bullish Divergence Gold Trading

This example uses MACD indicator as a Gold divergence indicator.

From the above bullish divergence example the xauusd price made a lower low(LL) but the indicator made a higher low(HL), this shows there is a divergence between the xauusd price & the indicator. This signal warns of a possible gold trend reversal.

Classic bullish diverging signal warns of a possible change in the gold trend from down to up. This is because even though the xauusd price went lower the volume of sellers that pushed the xauusd trading price lower was less as illustrated by the MACD technical indicator. This indicates underlying weakness of the downward Gold trend.

Gold Trading Hidden Bullish Divergence

This bullish divergence setup happens when price is forming a higher low ( HL ), but the oscillator (indicator) is showing a lower low (LL). To remember them easily think of them as W-shapes on Chart patterns. It occurs when there is a retracement in an upwards Gold trend.

The bullish divergence example illustrated and explained below shows an image of this gold trading setup, from the image the xauusd trading price made higher low (HL) but the indicator made a lower low (LL), this shows that there was a diverging signal between the xauusd price & indicator. This signal shows that soon the xauusd market up gold trend is going to resume. In other words it shows this was just a retracement in an upwards gold trend.

Gold Trading Hidden Bullish Divergence- Bullish Divergence Gold Trading

This bullish divergence confirms that a retracement move is complete and indicates underlying strength of an upward xauusd trend.