Currency Analysis Explanations
The Relative Strength Index (RSI) is a technical analysis tool that measures the strength and momentum of a financial asset's price movement. It is represented by values ranging from 0 to 100, and is used to identify overbought or oversold conditions.
How to read RSI:
1. Above 70: Indicates that the asset is overbought, and a price correction may occur.
2. Below 30: Indicates oversold, indicating that the price may rise soon.
3. Between 30 and 70: It is considered a normal range that reflects stable price movement.
Uses:
Identifying potential reversals: When the indicator reaches extreme levels.
Trend confirmation: If the indicator moves in a direction consistent with the price movement.
Equation:
RSI = 100 - (100 / (1 + (Average High / Average Low))).
For more in-depth information, you can visit Investopedia and TradingView.