Normalizing Major Currencies to Compare Their Moves Against the Dollar

Summary

This indicator description explains a way to compare the movements of seven major currencies against the US dollar. Each series is rebased to a common starting point, allowing changes over the selected period to be viewed on a shared relative scale. An exponentially weighted moving average is applied to smooth the plotted values, which are updated as each new period is added.

The Canadian dollar, Swiss franc, and Japanese yen series are inverted and drawn with dotted lines because standard USD pair quotes express those currencies in the opposite direction from the other pairs. The description notes that the full display may appear only after changing the period. It does not specify the normalization formula, smoothing parameters, data source, or a trading rule, nor does it provide performance evidence. The indicator is therefore best understood as a visual comparison aid for currency strength and direction, with quote conventions and display behavior to bear in mind.

Key ideas

• The indicator rebases seven major currency series to a shared starting point for relative comparison against the US dollar.
• An exponentially weighted moving average smooths the displayed currency paths.
• The Canadian dollar, Swiss franc, and Japanese yen are inverted to account for their quote convention.
• The description presents a visualization, not a tested trading strategy or performance claim.

Tags

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