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For example, to calculate the strength of the USD, the currency strength meter would calculate the strength of all pairs containing the USD (e.g. USDJPY, EURUSD, GBPUSD, AUDUSD, etc.) and then put those calculations together to determine the overall result for the US dollar.



This is in contrast to a currency-index. US Dollar Indexes, for example, are weighted indicators that compare the Dollar’s value relative to a group of currencies. As an example, the US Dollar Indice is currently weighted at the moment:Euro 56.7,Yen 13.6% British Pound 11.9% Canadian Dollar 9.1% Swedish Krona 4.2% and Swiss Franc 3.6%.

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However, It does make it complicated to judge the performance of a currency in isolation. Consider the Euro/US Dollar currency pair (EURUSD). If it has gained strongly on the day, is it because the EUR is doing well, or is it because the USD is performing poorly?



Due to the high correlation between currency pairs, it is possible to conclude that GBP (the shared currency between the pairs), is driving these movements. Therefore, GBP is the strongest example of currency strength.

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A lesser known, but more comprehensive measure is the broad USD index, which uses a wider selection of currencies. Both work in a similar way. They calculate the strength of the Dollar by aggregating bilateral exchange rates into a single number, and then applying a weighting for the currencies included. The weighting applied for the broad index is a trade weighting, derived from trade data. Specifically, this is the share of merchandise imports in annual bilateral trade with the U.S.



This is in contrast to a currency-index. US Dollar Indexes for instance are weighted instruments that compare the Dollar’s value to a basket. At the time of writing, the US Dollar Indice is as follows:Euro 56.7,Yen 13.6% British Pound 11.9% Canadian Dollar 9.1% Swedish Krona 4.2% and Swiss Franc 3.6%.

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mt5 currency strength meter





This Forex indicator displays which currencies are strong and which are weak at any given moment, reflecting that movement in a matrix. By using an effective currency strength meter, you will have another tool at your disposal that will empower you to become a profitable trader.



It continuously checks the forex data to determine the current strength. Refresh the page and any changes will be displayed.

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Using the Forex Currency Strength Meter in conjunction with support and resistance indicators, for example, can potentially yield better results as a more complete trading strategy.







In the first pair, GBP is the quoted currency. Therefore, long trades expect EUR to strengthen against GBP. The GBP, which is the base money in the second pair of pairs, is used. Long trades assume that the GBP will strengthen against the USD. This means that a long EURGBP trading is one where the GBP is expected to weaken while a GBPUSD long trading is one where the GBP is expected to strengthen.

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Simply, a currency strength meter is a visual guide that demonstrates which currencies are currently strong, and which ones are weak. Currency strength indicators use the exchange rates of different currency pairs to produce an aggregate, comparable strength of each currency. Simple meters may not use any weighting, while more advanced ones may apply their own weightings. They may even combine other indicators with the currency strength measurement, to provide trading signals.



It's useful for a quick overview of which currencies you might wish to trade and which currency it might be worth staying clear of. Trading opportunities may be available if you are trading a currency that is strong but suddenly becomes weaker. A divergence between currencies can indicate momentum. In contrast, if two currencies have weak, strong, or average strengths, then there may be sideways movement. These pairs might be best avoided.

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One aspect of the Forex (FX) market that differentiates it from other financial markets is the concept of currency pairs. When you take an FX position, you gain exposure to two different currencies. This creates many interesting opportunities, including the ability to measure one currency's strength against another.







The meter measures the forex pairs over the past 24 hours and applies calculations. It then aggregates each of these pairs to find the current strength.