It's one of the many technical indicators that tell you when to enter and exit a market. It's usually in the form of a score from 0-100. Anything over 80 means that the currency is oversold, while anything below 20 means it is overbought.

In technical analysis, this is a momentum indicator measuring overbought and oversold levels, similar to a stochastic oscillator. It was developed by Larry Williams and compares a stock's close to the high-low range over a certain period of time, usually 14 days.