Commodity Channel Index (CCI)

The Commodity Channel Index, or CCI, is an oscillator that measures how far the current typical price sits from its own moving average, scaled by average deviation, so most readings fall between +100 and -100. Despite the name, this momentum indicator is applied to any market, currency pairs included. Values above +100 are described as unusually strong and below -100 as unusually weak; traders either fade those extremes as overbought and oversold conditions or use crosses back through the zero line as trend signals. Like other unbounded oscillators, CCI can sit at extreme levels for a long time inside a strong trend, so it is normally combined with trend context, divergence or a price-action trigger rather than traded alone.