So, let’s take a small example, where DXY forms a higher high, but EURUSD fails to expand lower and form a lower low. Instead, it will form a higher low.

This is our crack. Here we see divergence.

As DXY creates a higher high, EU fails to make a lower low.

This is where we become decoupled.

Here we can anticipate a reversal to happen, especially if price has already delivered into a certain PDA for DXY.

Here an example, see how price took out BSL on DXY, and formed a local new high. On EURUSD it did not.

And now that's how we note the divergence.