Currency Index Candles from Six USD Exchange Rates

Summary

This indicator constructs a currency index using the USD index and six major currency pairs: EURUSD, USDJPY, GBPUSD, USDCAD, USDSEK, and USDCHF. Unlike a close-only index calculation, it uses each pair’s open, high, low, and close prices to produce candle-style index values. The examples describe calculations for currencies such as EUR and CHF, including inversion for currencies quoted against the dollar.

Users select the currency and can invert the plotted series. It can be displayed on charts for any currency pair, but requires historical data for all six component pairs; initial loading or a timeframe change may delay the calculation. The document describes the construction and operational requirements, but provides no performance testing or trading rules. Index values therefore serve as a relative currency display, not evidence of a profitable strategy.

Key ideas

• The index uses six USD currency pairs as inputs to calculate a currency’s relative value.
• It uses OHLC prices to form candles rather than relying only on closing prices.
• The plotted series can be inverted through a user setting.
• Historical data for every component pair must be available before the index is calculated.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.