Backtest evidence

Once RSI enters the zone above 70 or below 30, does it reverse — and how long does it stay?

How Long Does RSI Stay Overbought? 3 Years of USD/JPY Tested

Finding

It did not reverse at once. With hourly RSI 14 across 2023 to 2025, the upper zone continued into the next bar in 60.3% of USD/JPY runs and 67.3% of EUR/USD runs; the lower zone in 60.3% and 55.8%. On USD/JPY 19.2% of hourly upper runs lasted at least ten bars against 6.3% below 30; on EUR/USD the rates were 10.1% and 8.1%, so the asymmetry depends on the pair. Across lengths 7 to 50, hourly next-bar persistence ranged from 56.5% to 64.7% on USD/JPY and 52.3% to 64.3% on EUR/USD, with no steady direction. A five-bar hourly fade entered the moment RSI reached the zone averaged −1.97, +0.26 and −2.29 pips on USD/JPY in 2023 to 2025, and −0.96, +0.73 and −0.49 on EUR/USD. Narrowing to 80/20 still left next-bar rates of 57.9% and 55.3% on USD/JPY and 53.8% on both sides of EUR/USD.

Key results

Next-bar persistence, hourly RSI 14
upper zone 60.3% USD/JPY and 67.3% EUR/USD; lower zone 60.3% and 55.8%
Runs lasting ten bars or more
USD/JPY 19.2% above 70 and 6.3% below 30; EUR/USD 10.1% and 8.1%
Five-bar fade entered on reaching the zone
USD/JPY −1.97 / +0.26 / −2.29 pips; EUR/USD −0.96 / +0.73 / −0.49 pips

Scope

  • USD/JPY and EUR/USD, January 1, 2023 to December 31, 2025
  • Fifteen-minute, hourly and four-hour bars; RSI 14 defined on 74,800 / 18,701 / 4,835 USD/JPY bars and 74,797 / 18,701 / 4,835 EUR/USD bars
  • 6 RSI lengths (7, 9, 14, 21, 30, 50) x 5 level pairs (80/20 to 60/40) x 4 holding periods (1, 3, 5, 10 bars)
  • Pip size: USD/JPY 0.01 yen, EUR/USD 0.0001 dollars

Method

A run starts when the previous bar was outside the zone and the current bar is the first inside it, and ends at the first bar back outside; the length is the count of bars in between. The fade shorts the upper zone and buys the lower one, filling at the next bar's open using recorded bid and ask prices.

Limitations

  • The sample contains USD/JPY and EUR/USD in 2023 to 2025. Other markets and regimes can have different run lengths.
  • RSI uses closing prices. Intrabar touches of 70 or 30 that did not survive to the close are excluded.
  • Runs already open at the start of a year and runs still open at year-end are excluded because their full duration is unknown within that year's sample.
  • The 80/20 and RSI 50 samples are small, so their percentages are uncertain.
  • Each run is treated as an independent event. Trades can overlap, and summed pips are not a portfolio return.
  • Trend, volatility and session filters, stops, and profit targets were not tested.