DXY bull flag
DXY is currently shifting towards a bearish market trend. On the weekly chart, we don't have a clear swing point to reference. Therefore, I'm observing the RSI (Relative Strength Index) sloping down after rebounding from 70. The current reading is at 53.14, and the MACD (Moving Average Convergence Divergence) is still above the midline. It's possible that last week's bearish movement was a liquidity sweep that cleared out sell-side orders. To confirm this, price would need to rally back into the zone, and RSI should bounce off the midline.
On the 4-hour chart, we can see the 10-day EMA (Exponential Moving Average) crossing below the 20-day EMA, and the price is significantly below the 50-day EMA. Price is in a downward trend, forming lower lows and breaking structure twice, with all highs failing to hold. RSI is in oversold territory, and MACD is close to its maximum level in oversold conditions. If the price quickly recovers from the recent low established on Friday, we can anticipate a return to a bullish trend, which can be labeled as a "spring." If the price rallies back above the 50-day EMA, it may continue to the opening gap created last Wednesday.
The new monthly candle is only a week old, but it has a bearish sentiment. The Choch swing low on October 11 crossed below the 20-day EMA, and the subsequent swing low on October 24 broke the previous swing, rebounding from the 50-day EMA. However, the last decline on Friday disrupted the market structure and settled below the 50-day EMA.
My only reason for considering a bullish scenario is the extreme oversold conditions seen on the 1-hour and 4-hour charts. The 1-day chart resembles a classic bull flag pattern, but for it to hold, we need to witness a bullish rally into the zone; otherwise, the overall sentiment remains bearish, potentially targeting the swing low at 104.665, just above the 200-day EMA at 104.190.
On the 4-hour chart, we can see the 10-day EMA (Exponential Moving Average) crossing below the 20-day EMA, and the price is significantly below the 50-day EMA. Price is in a downward trend, forming lower lows and breaking structure twice, with all highs failing to hold. RSI is in oversold territory, and MACD is close to its maximum level in oversold conditions. If the price quickly recovers from the recent low established on Friday, we can anticipate a return to a bullish trend, which can be labeled as a "spring." If the price rallies back above the 50-day EMA, it may continue to the opening gap created last Wednesday.
The new monthly candle is only a week old, but it has a bearish sentiment. The Choch swing low on October 11 crossed below the 20-day EMA, and the subsequent swing low on October 24 broke the previous swing, rebounding from the 50-day EMA. However, the last decline on Friday disrupted the market structure and settled below the 50-day EMA.
My only reason for considering a bullish scenario is the extreme oversold conditions seen on the 1-hour and 4-hour charts. The 1-day chart resembles a classic bull flag pattern, but for it to hold, we need to witness a bullish rally into the zone; otherwise, the overall sentiment remains bearish, potentially targeting the swing low at 104.665, just above the 200-day EMA at 104.190.
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discord.gg/a7sfTVkgxc
I’m part of a free Discord group where we help each other navigate the market and overcome trading challenges. It’s a friendly, supportive community, with members from around the globe.
I’m part of a free Discord group where we help each other navigate the market and overcome trading challenges. It’s a friendly, supportive community, with members from around the globe.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.