The FX AlgoTrader Strength Analyzer is effectively an RSI (Relative Strength Index) aggregator.
RSI is a technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. It is calculated using the following formula:
RSI = 100 - 100/(1 + RS*)
*Where RS = Average of x days' up closes / Average of x days' down closes.
RSI ranges from 0 to 100. An asset is deemed to be overbought once the RSI approaches 70, ie it could be overvalued and a good candidate for a pullback. Likewise, if the RSI approaches 30, it's an indication the asset may be oversold and therefore likely to become undervalued.
The FX AlgoTrader Strength Analyzer tool aggregates a basket of currency pairs and then creates an aggregate RSI component for each major currency.
The relative strengths aggregates are made up as follows:-
EURUSD, EURGBP, EURCHF, EURJPY, EURTRY, EURAUD, EURNZD, EURCAD, EURSEK, EURNOK,EURRUB, EURHUF, EURPLN, EURCZK.
GBPUSD, GBPJPY, GBPAUD, GBPCHF, GBPCAD, GBPNZD, EURGBP
EURUSD, USDJPY, USDCHF, GBPUSD, AUDUSD, NZDUSD, USDCAD, USDTRY, USDZAR, USDSEK, USDNOK, USDSGD USDRUB, USDPLN, USDHUF, USDCZK, USDZAR
USDCHF, GBPCHF, EURCHF, CHFJPY, NZDCHF
USDJPY, GBPJPY, EURJPY, TRYJPY, CADJPY, CHFJPY, NZDJPY, AUDJPY, ZARJPY, USDJPY
AUDUSD, EURCAD, CADJPY, AUDCAD, USDCAD, GBPCAD
AUDUSD, AUDCAD, AUDJPY, AUDNZD, GBPAUD, EURAUD