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LDC1614EVM: how to use digital output from LDC1614

Part Number: LDC1614EVM
Other Parts Discussed in Thread: LDC1614, LDC1314

Hello Team,

    We want to develop rotary inductive encoder using LDC1614, below are the spec of that encoder.

Channel - 2 (90 degree phase shift between them)

Output- Incremental

Pule per revolution (PPR) - 1 to 1024

We are thinking to use LDC1614 and MS430 process. to process output data in required format we try to capture signal at CH0 as shown in below image but without putting any metal we it is showing square wave pulse. ideally without any metal it should not show any data right ? Please guide to where to check output of LDC1614 before going into microcontroller. what kind of output will be available at LDC1614 output.

Regards,

Sayali