Currency Heat Map

Last Updated: Nov 21 09:00 GMT

Last Updated: Nov 21 09:00 GMT

Last Updated: Nov 21 09:00 GMT

The objective of the Currency Heat Map is to provide a graphical presentation on the relative strengths of major currencies relative to others. For example, one could see EUR/USD rising and jumps into conclusion on the strength on Euro. But in fact, the strength in EUR/USD could merely be due to weakness in Dollar rather than strength in Euro. It could happen that Euro may instead fall against Sterling, Swiss Franc and Yen. In such case, the EUR/USD may not a good choice to buy on Dollar weakness. Another point to note is that while a currency pair is rising or falling, it may just be part of a move inside a consolidation pattern. Hence, it’s important to note whether the currency pair is trading inside or outside the prior bar’s range to determine if it’s really trending with respective to the concerned time frame.

Key:

The Currency Heat Map is presented to indicate the strength of the ROW/COLUMN pair.

In the example below:

1. According to the second cell in the first row, which is Dark Blue in color, USD/EUR is trading above prior bar’s high. In other words, the familiar EUR/USD is below prior bar’s low.
2. Also, according to first row, which has the second, fourth, sixth cell in Dark Blue, fifth and seventh cell in Blue. It means USD/EUR, USD/GBP, USD/CAD are trading above prior bar’s high. USD/CHF and USD/AUD is trading above prior bar’s close though limited below prior bar’s high. Obviously, Dollar is having some strength except against the Japanese Yen.
3. In the second row, cell color is Dark red in the first, third and fifth cell and Red in the fourth cell. It means, EUR/USD, EUR/JPY and EUR/CHF are trading below prior bar’s low. EUR/GBP is lower than prior bar’s close even though it’s above prior bar’s low. Obviously, Euro is weak among the majors in the respective time frame.
4. Now, readers can see as shown in the third row that the Japanese Yen is having tremendous strengths, trading above prior bar’s high against all currencies shown.

Example: