U.S. Dollar Index (DXY)- Daily Timeframe Analysis 🔎 Market Structure
The Dollar Index (DXY) remains in a bearish market structure, forming consistent lower highs and lower lows. Price action is currently reacting within important Fair Value Gaps (FVGs), which often act as magnet zones for liquidity and corrective moves before resuming the primary trend.
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🟪 Higher-Timeframe Fair Value Gaps
April FVG (Purple Box): Price previously filled part of this imbalance but failed to sustain a bullish continuation. This reinforced bearish order flow.
September FVG (Blue Box): Price recently tapped into this imbalance, where sellers may look to re-enter the market.
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📉 Bearish Reaction Zones
99.000 – 100.000 (Red Box): A critical supply zone aligning with the upper boundary of the blue fair value gap. If price retests this region, strong rejection is likely.
Current price around 97.96 suggests the market is already reacting to this supply/FVG area.
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🔮 Directional Bias
The broader expectation is for the DXY to form a new lower high before resuming bearish momentum.
Two possible scenarios are highlighted:
1. Rejection directly from the current FVG zone (97.9 – 99.0) → continuation lower.
2. Slight extension into the upper supply zone (99.5 – 100.0) → liquidity grab → sharp bearish reversal.
Both paths suggest a downside move targeting 96.20 and potentially lower levels.
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📌 Summary for Traders
Bias: Bearish
Key Resistance: 99.0 – 100.0 (FVG + Supply Zone)
Key Support: 96.20 (short-term target)
Expectation: Formation of a lower high, followed by renewed selling pressure.
⚠️ Note: Always confirm with confluence (macroeconomic data, USD pairs’ correlation, and risk management rules) before entering trades.
