RSI Swing Failure XAUUSD Setup
RSI xauusd swing failure can be a very accurate method for short term moves. It can also be used for trading long term trends but it's best suited and fitted for short term xauusd especially for those traders that trade reversals.
The RSI swing failure swing xauusd setup is a confirmation of a pending market reversal. This swing failure set-ups a leading break out signal, it warns that a support/resistance zone in the market is going to be penetrated. This setup should occur at values/readings above 70 for an upward trend and readings below 30 in a downwards trend.
Swing Failure In an Upwards Trend
If the RSI Indicator touches 79 then pulls back/retraces to 72, then rises to 76 and finally drops to below 72 this is considered a failure swing RSI setup. Since the 72 level is an RSI support level & it has been penetrated it means that price will & follow & it'll penetrate its support zone.
In the exemplification shown below, the RSI indicator hits 73 then retraces to 56, this is a support zone. The indicator then rises to 68 & then drops to below 56, thus breaking the support zone. The price then follows afterwards breaking it support zone. The RSI swing failure is a leading signal & it is confirmed when the price also breaks it support zone. Some traders open trades once the swing failure is complete while other traders wait for trading price confirmation, either way it is for a xauusd/gold trader to decide what works best for them.
XAUUSD RSI Swing Failure in an Upward Trend
Swing Failure In a Downward Trend
If the RSI Indicator touches 20 then pulls back/retraces to 28, then falls to 24 & finally penetrates above 28, this is considered a failure swing setup. Since the 28 level is an RSI resistance level & it has been penetrated it means that price will and follow and it'll penetrate its resistance zone.
XAUUSD RSI Swing Failure in a Downward Trend
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