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The Clouds filter uses the Foreground and Background Colors to replace the image with clouds. If you hold down the Alt/Option key, you can produce clouds with more contrast. The filter is most useful to add texture to areas of sky.
ORIGINAL IMAGE
DEFAULT CLOUDS
With the default Foreground/Background colors of black and white, respectively, the filter covers up the original image entirely with white clouds on a gray to black background.
Foreground/Background Colors
CLOUDS
New Foreground and Background Colors were chosen from the image (see below) before the Clouds filter was applied to a new layer. The Multiply blending mode was then selected for the new layer, giving this effect.
Foreground/Background Colors