The Currencies Heat Map provides a graphical representation of the relative strengths of major currencies relative to others, organizing the data from 20 currency
pairs into color-coded results thus producing a clear overview of the whole Forex market.
Most Forex traders overlook the whole Forex market picture, by just looking at one pair and one timeframe. This means that you could buy GBPUSD expecting
USD to weaken but if you look at other pairs you may find that USD is rising against other currencies and that buying GBPUSD is not a good choice. Now
traders can add the Currencies Heat Map to their trading tools arsenal to filter trading strategy signals, confirm the analysis and trade with more confidence.
How to read Currencies Heat Map
The key to read the Heat Map is to consider the currency which appears on rows as the base currency and the currency which appear on columns as the quoted currency. Let's see some examples:
Suppose that EUR/USD is above its previous daily close. If you look at the daily Heat Map, you will find that EUR (second row)/USD (first column) will be light green-coloured. Conversely the opposite cell, USD (first row) / EUR (second column) will be light red-coloured. In any case, this means that EUR is bullish against the USD (USD is bearish against the EUR) in the daily timeframe.
Suppose that GPB/USD is above its previous 4 hours high and close. If you look at the 4 hours Heat Map, you will find that GBP (fourth row)/USD (first column) will be dark green-coloured. Conversely the opposite cell, USD (first row) / GBP (fourth column) will be dark red-coloured. In any case, this means that GBP is strongly bullish against the USD (USD is strongly bearish against the GBP) in the 4 hours timeframe.
Suppose that USD/CHF is below above its previous weekly close. If you look at the weekly Heat Map, you will find that USD (first row)/CHF (fifth column) will be light red-coloured. Conversely the opposite cell, CHF (fifth row) / USD (first column) will be light green-coloured. In any case, this means that USD is bearish against the CHF (CHF is bullish against the USD) in the weekly timeframe.
Suppose that USD/JPY is below its previous monthly low and close. If you look at the monthly Heat Map, you will find that USD (first row)/JPY (third column) will be dark red-coloured. Conversely the opposite cell, JPY (third row) / USD (first column) will be dark green-coloured. In any case, this means that USD is strongly bearish against the JPY (JPY is strongly bullish against the USD) in the monthly timeframe.
