The Morale Level is a mechanic in Xenoblade Chronicles X. It is also known as the Soul Stage in the Japanese version. This mechanic is linked to the Soul Voice mechanic. It is represented as a three-bar gauge above the arts palette with the HP and the TP gauges. One bar can be filled whenever a Soul Challenge is successful. The Morale Level is somewhat similar to the Tension mechanic in Xenoblade Chronicles.
The main purpose of Morale is that the more bars of the gauge are filled, the higher the chance of a party member triggering a Soul Challenge. One bar of the Morale Level gauge is filled each time a Soul Challenge is successful. In addition, some Arts rely on Morale to get additional effects, with stronger effects depending on the number of bars filled.