Forex Trading Strategy – Combining Exponential Moving Averages and Relative Strength Index

Written by Miroslav Marinov

Miroslav Marinov

Miroslav Marinov, a financial news editor at TradingPedia, is engaged with observing and reporting on the tendencies in the Foreign Exchange Market, as currently his focus is set on the major currencies of eight developed nations worldwide.

, | Updated: September 12, 2025

Traders who do not have much time to examine price charts may find this simple strategy attractive. The strategy uses a 1-day time frame and the following indicators: a 5-period Exponential Moving Average (EMA), a 12-period EMA, and the Relative Strength Index (RSI) with its period set to 21. This approach can be applied to any currency pair. For illustration, we use AUD/USD.

A trader will usually look for a long entry when the 5-period EMA (white on the chart below) crosses the 12-period EMA (green) from below, while the RSI is above 50.00.

A trader will usually look for a short entry when the 5-period EMA crosses the 12-period EMA from above, while the RSI is below 50.00.

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A trader will usually look to close the position when the two exponential moving averages cross again or when the RSI moves back through 50.00.

Below we provide examples of both a long and a short trade based on this strategy.