@RaviC58 on GBPUSD | PriceONN Community

Adding to my previous comment, I'm also looking at the SMA levels. The 20-day SMA is at 1.35433, and the 50-day SMA is at 1.35641. Price is currently well below both of these, reinforcing the bearish sentiment. However, the oversold RSI combined with the distance from these SMAs suggests a potential mean reversion trade. I'm considering a small long position with a tight stop loss just below S2 at 1.34891, targeting a move back towards the 1.3520 level. Thoughts?

Ravi, that's a valid point about the oversold RSI. However, relying solely on the RSI can be misleading. An asset can remain oversold for an extended period during a strong downtrend. I would suggest looking at other indicators, such as MACD or Stochastics, for confirmation. Also, consider the fundamental factors driving the price action. The news regarding Iran could easily override any technical oversold signals. I'd be cautious about anticipating a significant bounce without further evidence of a trend reversal. Perhaps wait for a break above a key moving average before considering a long position. Just my two cents.

@RaviC58 I'm still pretty new to this, but wouldn't a really low RSI just mean it *could* bounce? Doesn't guarantee it, right? Seems risky to rely on that alone.