DXY, Completed The Formation, These Outcomes Possible Now!

Hi, welcome to this analysis, we are looking at the USD Currency Index 4-hour timeframe perspective, since a long journey to the downside the index came around with a potential bottom building. Since the corona increase has taken place the index was on the way to the downside and now there are some possible reversal insight apart of these long downtrend establishments. Now a big question is if the index just sets up to form the next protracted bearish leg to the downside or if it really gets into a strong reversal which can point to higher levels in the structure, therefore I detected all the important levels and the possible outcomes we can expect for the index in its current structural allocation.

Looking at my chart you can watch there the preliminary bottom has been taken place with the inverse head and shoulder formation formed, this formation already confirmed and broke above the neckline with a strong and volatile bullish move currently testing the second descending dashed trendline marked in grey where the index has the second major resistance similar to the first descending dashed trendline. The next times a possible consolidation can take place as it is marked in my chart when the index then reaches out to confirm the blue 100-EMA as support this can be the origin for the breakout of the trendline resistance to the upside, in this case, the index needs to gain the appropriate strength before showing up with the proper breakout.

When the index shows up with the most likely scenario currently existing within the schedule, that is the breakout above the resistance it will move further till upside targets are reached which the index has at the 95.5 to 96 level marked in orange in my chart, this level is also horizontal resistance and when the index reaches out to this it has to be elevated if the index forms further bullishness here or a pullback occurs that firstly visits some lower levels, overall we can expect the next moves to the upside till resistance as the head and shoulder targets also already have not been reached yet. It will be interesting to see how the index develops further in the current structure and how it will react in the target zones.

In this manner, thank you for watching, support for more market insight, good day to you, and all the best!
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Information provided is only educational and should not be used to take action in the markets.