How to read Forex Metrics Currency Index and Continuous Moving Average

• Forex Metrics Currency Index quantifies fundamental changes in
  individual economy as well as global economy by measuring the changes in relative currencies value through individual currency Index.

• Forex Metrics Currency Index represents Value of single global currency or Reserve Currency.

• Forex Metrics Currency Index upward movement indicates a positive fundamental outlook of global economic growth.

• Upward movement in Individual currency basket / index indicates a positive outlook of that particular economy.

• Forex Metrics Currency Index downward movement indicates a negative fundamental outlook of global economic growth.

• Downward movement in Individual currency basket / index indicates a positive outlook of that particular economy.

• Continuous Moving Average (CMA) of Forex Metrics Currency Index is a long term average that signifies long term fundamental outlook.

• FMCI greater than CMA Global economic outlook is Positive.

• FMCI less than CMA Global economic outlook is Negative.

• When FMCI crosses CMA, it signifies a fundamental change of trend.

• Difference between FMCI and CMA signifies intensity of boom or burst in global economic scenario.

• Higher the difference, higher the volatility in value of currencies and economic uncertainty.

• Small difference indicates stability in global economics and value of currencies.

• If CMA is greater than FMCI: Increasing difference between CMA and FMCI signifies severity in net global economic growth and recession/deflationary pressure.

• If CMA is greater than FMCI: Decreasing difference between CMA and FMCI signifies net global economic recovery and easing of recessionary/deflationary pressure.

• If CMA is less than FMCI: Increasing difference between CMA and FMCI signifies boom in net global economic growth and rising inflationary pressure.

• If CMA is less than FMCI: Decreasing difference between CMA and FMCI signifies stabilizing net global economic growth and easing inflationary pressure.

How to read FMCI Currency Basket?

Forex Metrics Currency Index is based on 10 Major convertible currencies and it is an average of 10 currency indices.

• If CMA of a currency Basket is less than FMCI: Currency is Bullish.

• If CMA of a currency basket is greater than FMCI of basket: Currency basket is Bearish.

• If individual currency index is above its CMA, while CMA of FMCI is Negative, that particular currency index is read as bullish.

• If individual currency index is above its CMA, while CMA of FMCI is Positive, that particular currency index is read as relatively bullish.

• If individual currency index is below its CMA, while CMA of FMCI is Positive, that particular currency index is read as bearish.

• If individual currency index is below its CMA, while CMA of FMCI is Negative, that particular currency index is read as relatively bearish.

• Crossover of CMA over FMCI is change of trend of that particular basket.