MACD
Trend-following momentum indicator built from the difference between a 12- and 26-period EMA, with a 9-period signal line and histogram.
MACD line = EMA(12) − EMA(26); Signal = EMA(9) of MACD line; Histogram = MACD line − Signal
MACD (Moving Average Convergence Divergence) subtracts a slower EMA (26) from a faster EMA (12) to produce the MACD line. A 9-period EMA of that line, the signal line, smooths it further. The histogram plots the gap between the two.
The primary signals are: signal-line crossovers (MACD crossing above = bullish), zero-line crossovers (MACD turning positive = trend shift), and divergence between MACD peaks and price peaks. Histogram contraction warns momentum is fading before the crossover appears.
On the desk
On a daily EUR/USD chart, the MACD line crosses above the signal line while both are still below zero — a bullish crossover from oversold territory. Histogram bars shift from negative to positive, confirming the signal. Traders enter long with a stop below the recent swing low.