Divergence on the daily time frame


I have been following an uptrend for several months now. I noticed that 4 months ago bearish divergence was found on the RSI oscillator but not on the MACD. The asset incurred about 1 month of lower highs and finally a significant lower low. After that lower low, It begin a strong trend up again. Until about a month ago when bearish divergence could be seen on the RSI and MACD. Now the currency has been making lower lows and lower highs for about 18 days.

My question would be do divergences signal trend reversals or can they signal retracements too? Or both?

Thank you for your help.

I forgot to mention. After the first regular bearish divergence I noticed hidden bullish divergence form soon after on the RSI.

Divergence only signal forthcoming reversal in trading price trend. Nobody knows how far the trend is going to last. It can be consider divergence mean impending retracement. The formation of 2 swings of High Low concludes the reversal in trend. IMHO.

sorry I am a little confused about your response perhaps because I do not fully understand reversals and retracements.

I define a reversal as a change of a trend. Then I define a retracement of a trend as a correction.

Is this accurate?

On higher time frames divergence is very useful tool! But, it gives only reversal trading signal!

To keep it simple, divergence means impending correction.