Are you still holding onto the AUD/USD? If so, you have to realize that the RSI (Relative Strength Index) is currently showing an unwinding of support to move back towards the mentioned support.
The RSI (Relative Strength Index) has moved into oversold territory. Here’s a picture that can explain what I mean. A head of a bull is on top of a table showing “positive”negative” numbers with the number one being the strongest.
Now, if you are going by this picture, you would say that the bulls are getting ready to jump off their bulls high. Notice how the RSI has dropped down below the red line, which is its normal level.
This shows that the RSI is now moving out of the oversold territory. It has now become the opposite, with the bulls celebrating. They have seen that the RSI has slipped below its normal range.
This is a major signal, as you can see, because it means that the RSI is now showing a moving sideways slope. You might say that it is moving away from the bulls’ table and closer to the bulls’ chin.
Now, remember, I said that the RSI (Relative Strength Index) is oversold. Remember, when it becomes oversold, it only takes one chart to change your mind. I’m not talking about very big changes.
Now that you understand that, you know that the bulls are now cheering each other on. The rally is over and the bears can now get some sleep at night. Some of them are probably crying.
The bears can now get some sleep at night, but the bulls have already seen the change in direction and are celebrating. Not only do they know that the RSI is now showing a moving sideways slope, but the RSI is now showing that the bulls are getting ready to jump off their bulls high.
They can’t be too happy about it, but the bulls know that the RSI is moving towards them, therefore, they can’t be too upset. And why should they be upset? It’s no big deal and now that the RSI has moved out of oversold territory, the rally is officially on.
As long as the RSI is showing that the bulls are moving away from their bulls high, then the bulls will be celebrating. And they’ll jump off their bull’s high and celebrate too.
It’s just a matter of time before the RSI falls again and the rally starts again. In fact, since the RSI is now showing that the bulls are now getting ready to jump off their bull’s high, we could soon see the bulls jumping right back up.
All the while, the bears are quietly sleeping as the bulls can’t be bothered to get them up and happy. But once the rally is over, the bulls will jump right back up. And then the fear will set in, because the bulls know that they are moving towards their bulls high, and if the RSI moves towards the bulls high too, the bulls will jump off the bulls high.