RSI compares the magnitude of recent up closes to recent down closes and normalises the result to a 0–100 scale. Readings above 70 are traditionally called "overbought" (price has moved up a lot recently) and below 30 "oversold." It is one of the most widely used momentum indicators in forex.
RSI is best used as confirmation, not a standalone signal. Strong trends routinely keep RSI pinned above 70 or below 30 for weeks — selling every time RSI hits 70 in an uptrend is a losing strategy. Pair it with price structure, trend context, and divergence (RSI making lower highs while price makes higher highs) for more reliable entries.