This indicator is based on two ideas:
- Correlations between 5 main currency pairs: EURUSD, GBPUSD, USDCHF, USDJPY, USDCAD;
- US Dollar Index = the value of the United States dollar relative to a basket of foreign currencies.
The use of the indicator is the same as classical Commodity
Channel Index (CCI) indicator.
CCI
is calculated with the following formula:
(Typical
Price – Simple Moving Average) / (0.015 x Mean Deviation)
(Typical Price – Simple Moving Average) / (0.015 x Mean Deviation)
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