Hey fellow traders! Today, I want to dive into the Coensio USD Strength Indicator (CUSIV01) and how it can give you a leg up when trading the greenback. This nifty tool measures the current strength of the USD by pulling data from four major currency pairs: EUR/USD, GBP/USD, AUD/USD, and USD/JPY. So, how does it work?
The indicator calculates the "momentary strength" of the USD for each pair by looking at the distance (in pips) between the closing price of each candle and the exponential moving average (EMA) line. Here’s the math behind it:
USDSTRENGTH = (-ΔEURUSD - ΔGBPUSD - ΔAUDUSD + ΔUSDJPY) / 4
To get started, just load the indicator on any chart and any time frame. You can set the "EMASize" to your preferred value, which acts as a reference point for determining the relative strength of the USD. Just a heads up: when you’re on the USD/JPY chart, the indicator will show the strength of the USD currency, so the histogram will appear in the opposite direction. Keep that in mind!
Input Parameters:
- EMASize: This is the period for calculating the indicator.
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