Failed Short Trade set-up on EURUSD hourly.

Yesterday, as seen on the Daily chart, price rallied upward only for it to be strongly halted (once again) by the base of a previous channel that was broken late last week. As a result of this strong upward price rejection, price turned downward and proceeded to break both lows of Monday and Tuesday (you might have to squint to see this).
NOTE: I lost a Long trade I took yesterday as result of this price move. Though, the H4 and Hourly parameters were in place, I had envisaged the possibility of the above scenario, and as such, risked only about 0.25% of my capital.

On the H4 chart the price movement described above resulted in price breaking the most recent swing low @ 1.3875, which automatically gave us a bearish bias; in other words, a bias for downward price movement.

On the Hourly chart, however, price recently broke above the most recent swing high @ 1.3926, and based on our trading method, that automatically nullifies any previous trade set-up we were anticipating.
Prior to price breaking the most recent swing high, the positive MACD divergence should have warned us of the imminent price reversal upward. Personally, this kept me from seeking a Short trade.

However, please note that MACD divergence – just like any other indicator – doesn’t always result in a valid warning. That’s one of the uncertainties we have to deal with when trading; we just have to stick to a particular approach for consistency on our part. NO ONE METHOD IS ERROR-PROOF.