U.S. Dollar IndexShort
DXY Dive Incoming? Watch the Liquidity Zones!
From the higher timeframe perspective, DXY is currently hovering within a key monthly Fair Value Gap (FVG), marked in red. This zone serves as a critical point of interest and could dictate the next directional bias for the dollar.
Key Observations:
Current FVG Zone:
-Price is consolidating within the monthly FVG. A close below this zone would provide stronger confirmation of a bearish move targeting lower liquidity levels.
Bearish Bias:
-The recent price action indicates weakness as sellside liquidity (SSL) is beginning to show signs of attraction.
-The presence of significant sellside liquidity targets below, including:
-105.411 (Weekly SSL - Sweep)
-103.370 (Weekly SSL - Next Zone)
-100.215 (Major Daily SSL Zone)
Messy Market Conditions:
-Due to fluctuating macroeconomic factors, including USD news events, we may observe temporary rallies or retracements. However, these are likely to form lower highs before continuing the descent.
Confirmation Levels:
-Bearish Confirmation: A daily or weekly close below the monthly FVG would solidify the bearish case, signaling that sellside liquidity at 105.411 and lower levels are likely next.
-Bullish Risk: If the current FVG holds as support and price pushes higher, we could see an attempt to retest higher zones (e.g., 109.535) before resuming downside momentum.
Conclusion:
The expectation is for DXY to drop towards sellside liquidity levels at 105.411, 103.370, and potentially as low as 100.215. However, traders should await a clean confirmation (such as a close below the monthly FVG) to validate the move.
DYOR (Do Your Own Research) and trade safely amidst potential market volatility!
Let me know if you'd like any refinements!
Key Observations:
Current FVG Zone:
-Price is consolidating within the monthly FVG. A close below this zone would provide stronger confirmation of a bearish move targeting lower liquidity levels.
Bearish Bias:
-The recent price action indicates weakness as sellside liquidity (SSL) is beginning to show signs of attraction.
-The presence of significant sellside liquidity targets below, including:
-105.411 (Weekly SSL - Sweep)
-103.370 (Weekly SSL - Next Zone)
-100.215 (Major Daily SSL Zone)
Messy Market Conditions:
-Due to fluctuating macroeconomic factors, including USD news events, we may observe temporary rallies or retracements. However, these are likely to form lower highs before continuing the descent.
Confirmation Levels:
-Bearish Confirmation: A daily or weekly close below the monthly FVG would solidify the bearish case, signaling that sellside liquidity at 105.411 and lower levels are likely next.
-Bullish Risk: If the current FVG holds as support and price pushes higher, we could see an attempt to retest higher zones (e.g., 109.535) before resuming downside momentum.
Conclusion:
The expectation is for DXY to drop towards sellside liquidity levels at 105.411, 103.370, and potentially as low as 100.215. However, traders should await a clean confirmation (such as a close below the monthly FVG) to validate the move.
DYOR (Do Your Own Research) and trade safely amidst potential market volatility!
Let me know if you'd like any refinements!
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