Fill color between 2 shape lines

Question

I've got two layers, a shape in each layer. What I want is to fill the lines between the two shapes. I've tried to merge the shapes but then it just stays completely filled in, like the screenshot.

I could bypass it by putting the first shape on top of the second and fill it with the same colour as the background, but I want it to be transparent.

I feel like this should be super easy but can't seem to figure it out.

Answer 1

• Highlight both shape layers in the Layers Panel and
  from the Layer Panel Menu choose Merge Shapes
  
  
• You get a single shape layer that has your paths and no fill
  
  
• In the Control Bar across the top of the screen, under the shape interaction item, choose Exclude Overlapping Shapes
  
  
• Reapply the fill
  
  

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The order of these steps isn't overly important. You can set the path interaction to Exclude and then merge the shapes - same end result.