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Can someone explain me how to this overlay ?


IamSam

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Open your image.

Make two duplicates. Turn off the original layer.
Select/Highlight the uppermost layer.
Convert the uppermost layer into a Smart Object. (Right click the layer and select "Convert to smart object".

Select your Rectangular Marquis Tool and set the feather to 25px.
Screen Shot 2016-12-28 at 11.09.16 PM.png

Make a selection of the area you wish to blur.
Screen Shot 2016-12-28 at 11.10.43 PM.png

Go to FILTER > BLUR > GAUSSIAN BLUR, and adjust (I used 8.0). Since this was added to a smart object it's called a smart filter and can be edited.
Screen Shot 2016-12-28 at 11.10.57 PM.png

Layers Panel.
Screen Shot 2016-12-28 at 11.11.31 PM.png

Another very easy way to do this would be to just blur the entire uppermost layer (that is a smart object) and use a layer mask with a gradient.
Screen Shot 2016-12-28 at 11.20.39 PM.png
 

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