First a gap down, trapping longs
Then a gap up, trapping shorts
DXY / DX1! is certainly playing with traders.
Note : USDXXX pairs have started moving up & XXXUSD pairs down. This should give an idea of where DXY will eventually go!
See here I have made major support and resistance lines in a 1 hr Chart for Nifty. As you can see 14347 to 14443 (86 Points ) zone is a painful one. Markets can be very volatile in this range hence for this zone best will be to use an option hedging strategy, do not take a directional view in this range. Also, keep an eye on the support trendlines near closing i.e...
EURUSD is hitting some weekly order blocks and is at a potential inflection point. It could go higher searching for liquidity, or could turn down from here.
Interesting point to note, US Dollar / DXY is also at an important (& opposite) inflection point. So is GBPUSD.
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GBPUSD is nearing some very potent bearish order blocks on the weekly chart, which can cause price to bounce back (at least temporarily).
Also, the price delivery while going up is very clean and has no apparent open bullish order block. So if it falls, there's nothing to support it.
Also, DXY and EURUSD are at their support & resistance (respectively). So this...
Here are some areas on DXY / Dollar Index / DX1! which are potential areas that could trigger a reaction.
Remember, don't trade these zones by themselves - but use a lower timeframe, like Daily or 4H to find the trading opportunities.
These zones on the weekly chart are a reference to what are some primed areas based on the history played out!
There's a liquidity buildup happening behind recent lows on 4H on USDCAD.
Right behind the liquidity is an area where a bunch of shorts are trapped.
This zone could be a great place to take a long position.
DXY / DX1! / FX:USDOLLAR / Dollar Index is searching for liquidity, bouncing up and down in the process.
This is my long term prediction on how it could move - given no major economic shifts.
DXY breaks below the Q1 2018 lows, collects liquidity
It then runs up to fill in the fair value gap from Q3 2020
It then falls down and get rejected...
The recent gap up in GBPUSD left a bunch of sellers trapped below the monthly lows.
When price comes back to them, they would love an exit - giving us a long entry!
Also : DXY seems to be moving lower, thereby confirming the up direction in GBPUSD.