RSI XAUUSD Technical Analysis and RSI Signals

Developed by J. Welles Wilder, explained in the book "New Concepts in Technical Trading Systems".

RSI is the most popular indicator & it is a momentum oscillator & a trend following indicator. RSI compares a price magnitude of the recent price gains against the magnitude of recent losses price losses & draws this data on a scale of values that ranges between 0-100.

Relative Strength Index measures the momentum of a instrument: values above 50 signify bullish momentum while values below 50 center-line signify bearish momentum.

Best RSI XAUUSD Technical Indicator Combination - Gold RSI Indicator Analysis

RSI is drawn as a green line
Horizontal dashed lines are drawn to identifying over bought & oversold levels are i.e. 70/30 levels respectively.

XAUUSD Technical Analysis and How to Generate Signals

There are several techniques used to trade, these are:

50-level Crossover Signals

Buy signal - when the indicator crosses above the 50 a buy/bullish signal is given.
Sell Signal - when the indicator crosses below 50 a sell/bearish signal is given.

Relative Strength Index - Best RSI XAUUSD Indicator Combination - RSI Indicator Described

RSI Gold Setup Patterns

Traders can draw trendlines & map out chart setups on the RSI indicator. The Relative Strength Index often forms xauusd patterns such as head & shoulders pattern which might not have formed clearly on the price chart.

Gold Support/Resistance Break outs

RSI is a leading indicator & can be used to predict Support/Resistance Break Outs before price breaks its support/resistance level. RSI uses the swing failure signal to predict when the price is about to break support & resistance areas.

RSI XAUUSD Indicator Technical Analysis - RSI XAUUSD Indicators - Gold RSI Buy and Sell Signals Indicator

Swing Failure - Support & Resistance Break out

Overbought/Oversold Conditions on Indicator

Overbought- levels above 80
Oversold- levels below 20

These levels can be used to generate signals such as when RSI turns up from below 20 after oversold, buy & sell when RSI crosses to below 80 after overbought, sell. These signals are not suitable for Trading because they are prone to a lot of fakeouts.

Divergence Setups

Divergence trading is one of technical analysis method used to trade reversals of the price trends. There are 4 types of divergences that can be traded with this technical indicator covered in the divergence tutorial on this website.