Hidden divergence on GBPUSD formed right at the bottom of the range, which is why, I called the daily binary signal for the 3pm expiration.
Hidden Divergence on GBPUSD at Bottom of Range
Earlier today I wrote about the major currencies being in a holding pattern prior to the FOMC announcement tomorrow. When markets are range bound, the easiest way to trade them is when they are either at the top or bottom of the range. Hidden divergence just gives the market the fuel it needs to go in your direction.
In this case, the lower timeframes were all oversold and the ATRs were stacking up under price. Literally connecting the red dots in the Stochastics allows you to identify the hidden divergence pattern (higher lows with lower lows in Stochastics). This pattern generally will produce a pop in price. Using an OTM binary option for trading the hidden divergence on GBPUSD allows you to potentially capture more profits (increasing your risk to reward ratio).
Immediately after the video was made, here is what happened: