How Currency Strength Works
Every forex pair involves two currencies. EUR/USD going up means EUR is strengthening against USD — but which currency is actually driving the move? The strength meter answers that by looking at all pairs containing each currency and aggregating their RSI values.
If EUR shows strength 68 and JPY shows 32, EUR/JPY is the highest-probability long — the strongest currency against the weakest. This is the core logic behind many institutional forex strategies.
Strength Scale
| Strength | Label | Implication |
|---|---|---|
| 70+ | Overbought | Strongest — may be due for pullback |
| 60–69 | Strong | Clear bullish momentum |
| 45–59 | Neutral | No clear directional bias |
| 30–44 | Weak | Clear bearish momentum |
| < 30 | Oversold | Weakest — may be due for bounce |
How to Trade Currency Strength
The basic rule: buy the strongest, sell the weakest. If the meter shows AUD at 65 (strong) and NZD at 35 (weak), AUD/NZD is your setup. But always check the correlation matrix — AUD and NZD are often correlated, which can dilute the edge. Use the correlation matrix to validate your pair selection before entry.
Strength readings are based on daily RSI — this makes the meter most useful for swing trades lasting 1-5 days. For intraday strength, use the heat map which shows current session percentage changes.