DXY Neutral -BearishCAPITALCOM:DXY
Quick read / bias
Near-term neutral → biased bearish.
Price has failed to produce a clean reversal from the large consolidation at the top, shows a series of lower-highs and liquidity hunts (marked ellipses / Imbalance repairs on the chart), and a visible “downside pressure” supply region above. The path of least resistance is down unless price reclaims the supply/consolidation zone above ~98.6–99.2.
------------------------------------------------
Key levels (from the chart)
Major consolidation / supply: ~99.2 – 99.8 (big-picture resistance).
Downside pressure / mid supply: ~98.5 – 98.8 (area to sell into).
Recent micro highs: 98.39, 98.19, 97.99 (loci for liquidity).
Current price (chart right): ~97.18.
Recent local low/liquidity grab: 96.834.
Weekly void / structural bottom to watch: 96.478 (labelled on chart).
Invalidation for bearish thesis: close/hold above 99.2 (reclaim of consolidation).
------------------------------------------------
How I read the structure (step-by-step)
Price spent time in a higher consolidation zone and then failed to reverse higher — that is a distribution / supply footprint rather than demand.
The chart shows several short liquidity hunts above swing highs (grey ellipses) and subsequent strong selling — classic stop-hunts into supply then continuation lower.
Imbalances / small supply boxes on the chart mark places the market tends to retest before continuing — these are high-probability sell zones on rallies.
The sequence of lower highs and a recent push down to ~96.83 (buyer defence) gives a local support but not yet a valid reversal signal. Until price chops through the weekly void (96.478) or reclaims the supply, expect range/biased-down behavior.
------------------------------------------------
Trade setups (actionable — use your 5-min/1-min workflow)
I’ll give two primary setups: a higher-probability short (sell the rally) and a contrarian long (mean-reversion). Use 5-min to identify displacement into the zone and 1-min for the exact micro reversal entry.
------------------------------------------------
Setup A — Primary: Short on rally into supply (preferred)
Why: Market structure + downside pressure + Imbalance above make rallies into supply favourable.
Area to enter (limit or wait for 1-min reversal): 98.00 – 98.20 (ideal limit ~98.10).
Stop loss: 98.45 (just above the 98.39 / structure swing and above the Imbalance top).
Targets (scale):
T1: 97.00 — first logical demand and psychological level.
T2: 96.50 — deeper swing support / mid structural level.
T3: 96.478 — weekly void bottom (big target if momentum continues).
Risk / reward (example entry 98.10 → stop 98.45):
Risk = 0.35 index points.
R:T1 ≈ 1.10 / 0.35 ≈ 3.14:1.
R:T2 ≈ 1.60 / 0.35 ≈ 4.57:1.
R:T3 ≈ 1.622 / 0.35 ≈ 4.63:1.
Trigger: 5-min displacement into the 98.0–98.2 zone, then 1-min rejection pattern (pin bar / engulf / two-bar reversal) and ideally a filled Imbalance or wick extension that fails. Enter limit at Imbalance top or use a short after 1-min confirmation.
------------------------------------------------
Setup B — Secondary: Mean-reversion long (countertrend)
Why: Buyers defended the 96.83 area previously; a clean, verified micro reversal at lower support can produce a quick retrace. This is lower probability vs the sell-the-rally plan and should be sized smaller.
Area to enter (limit/1-min confirmation): 96.75 – 96.95 (example limit 96.85).
Stop loss: 96.45 (below the 96.48 weekly void and the local wick).
Targets (scale):
T1: 97.40 (near recent chop / first structure).
T2: 97.99 (previous micro high).
T3: 98.39 (if momentum shifts to reclaim structure).
Risk / reward (example entry 96.85 → stop 96.45):
Risk = 0.40.
R:T1 ≈ 0.55 / 0.40 ≈ 1.38:1.
R:T2 ≈ 1.14 / 0.40 ≈ 2.85:1.
R:T3 ≈ 1.54 / 0.40 ≈ 3.85:1.
Trigger: Look for a 5-min exhaustion and 1-min clean micro reversal (two-bar bullish rejection) ideally with buy volume or a wick that holds. Keep size smaller than on shorts.
------------------------------------------------
Intraday scalp idea (quick)
Long scalp on a 1-min reversal after a displacement down to ~96.83 with tight stop under the wick (e.g. 5–8 ticks) and target 97.20–97.40. Use only if price shows clean microstructure and momentum.
Trade management rules
Positioning: Risk a fixed % per trade (e.g., 0.5–1% of account) and size accordingly. The short setup has high RR — size to risk tolerance.
Partial take: Take ~50% at T1, move stop to breakeven, let remainder run to T2/T3.
If price stalls at T1: tighten stop to lock profit or exit if structure shows weakness.
If price breaks and holds above 98.60 / 99.2: exit shorts and flip to neutral/bullish plan — the initial bearish thesis is invalidated.
Use your timeframe combo: identify the displacement on 5-min, execute 1-min entry confirmation.
------------------------------------------------
Invalidation / alternative scenario
Bearish invalidation: clean, sustained close above 98.6–99.2 (consolidation re-claim) — if that happens, the market likely shifts to bullish and short ideas should be abandoned.
Bullish trigger: rally above 99.2 with follow-through and a higher low -> targets back toward 99.8.
------------------------------------------------
Final prediction
Over the next sessions I expect failed rallies into 98.0–98.6 to be sold, which should gravitate price toward 97.00 → 96.50 → 96.48 if momentum confirms. Countertrend longs are possible as scalps/swing trades off 96.8–96.48, but they should be treated as lower-probability and sized smaller. If price instead reclaims and holds >99.2, the bearish bias is invalidated.
