High quality moiré fringe signal with a large gap between gratings can be obtained by employing grating Fresnel self-imaging for the construction of photoelectric rotary encoder, and the high contrast of moiré fringe remain unchanged, which permits the construction of optical encoder with fine gratings. A theoretical analysis of the Fresnel field observed behind one or two binary amplitude gratings, which was illuminated by a monochromatic plane wave, was presented based on the principle of Fourier optics. A mathematical model of the intensity distribution of Fresnel images and moiré fringe was developed. The theoretical formula was programmed in the MATLAB for convenient graphic calculation results, which analyzed the impact of some parameters such as the gap between gratings on moiré fringe signal. The theoretical analysis is corroborated by experiment.