EUR_USDindex is a combined indicator which consists of two separate ones: EURx and USDx (USDX). This indicator shows the changes in the both indices considering their correlation.
Formula
EURx=34.38805726*EURUSD^ (0.3155)*EURGBP^ (0.3056)*EUR/JPY^ (0.1891)*EURCHF^ (0.1113)*EURSEK^ (0.0785)
USDx = 50.14348112 × EURUSD (0.576) × USDJPY (0.136) × GBPUSD (-0.119) × USDCAD (0.091) × USDSEK (0.042) × USDCHF (0.036)
Trading use
Computer indicator EUR_USDindex, containing two indicators for the best performance, was designed to identify several major factors which can assist in active stock market trading.
From the practical point of view, EUR_USDindex is not a signal indicator for MetaTrader. As in the case with volatility, the index helps to define the subsidiary element.
- If EURx and USDx are in the wide range, it usually signifies the pronounced market trend. In this case it is possible to apply trend trading system.
- If EURx and USDx are in the close range, the market is in flat position. Thus, in such situation the break above resistance or below support levels would be more beneficial.
- The crossing of the two lines of the index confirms a new powerful market trend. In this situation the price can form new local lows or highs.
