The purchasing power of a currency when traded against other foreign currencies or used to trade products is referred to as relative currency strength. It is also a technical indicator that forex traders use in technical analysis to chart the historical and current strengths or weaknesses of currency pairs based on recent trading periods.
In the forex market, approximately 27 currency pairs are traded, with 7 of them being major currency pairs. These pairs were selected because they are economically stable and have insufficient demand. However, with so many currencies available to traders, it can be difficult to determine which is the most advantageous to trade, which is where relative strength comes into play.