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Dxysell
Analysis of the U.S. Dollar Index (DXY)Technical Analysis
Monthly Chart:
Since January 2023, the DXY has been moving within a range. The upper boundary of this range was marked by the 107.348 level, which has now been cleared. This breach of the previous high suggests that liquidity above the range has been taken, signaling the potential for a downside move. Historically, such liquidity grabs often precede significant reversals, aligning with the current bearish setup.
Daily Chart:
On the daily timeframe, the DXY displayed a sharp decline after taking out its last significant high. This aggressive sell-off has formed a strong bearish pattern, indicating a potential continuation to the downside. The presence of strong bearish momentum highlights sellers' dominance in the current market conditions, reinforcing the bearish outlook initiated by the liquidity grab on the monthly chart.
Price Targets:
Short-Term Target: A move toward 104.636 is expected as the DXY continues its bearish momentum, which aligns with immediate support and prior structural lows.
Medium-to-Long-Term Target: If the bearish trajectory persists, the DXY could reach the 101.917 level, which aligns with a significant support zone from previous price action. This target reflects the potential for extended downside in a broader bearish scenario.
Fundamental Analysis
Federal Reserve and Interest Rates:
Recent minutes from the Federal Reserve highlight concerns about continuing rate cuts due to the potential risks they pose to inflation. The Fed has signaled that further rate reductions would only be considered if both the labor market weakens and inflation continues to decline. However, these two factors are closely intertwined.
Labor Market Conditions:
Historically, the months of November and December exhibit strong employment trends due to holiday hiring. This seasonality reduces the likelihood of immediate rate cuts, as a robust labor market typically does not align with the conditions necessary for easing monetary policy.
Inflation Outlook:
For the Fed to proceed with aggressive rate cuts, inflation figures would need to remain stable or show further declines. If unemployment rises and inflation remains under control, the Fed may have room for another round of cuts. Such a scenario would support a long-term bearish outlook for the DXY, as lower interest rates reduce demand for the U.S. dollar.
Summary and Outlook
Technically, the DXY is positioned for further downside following the liquidity grab above the 107.348 level and the subsequent bearish pattern on the daily chart. Fundamentally, while seasonal strength in the labor market may delay immediate bearish moves, the broader macroeconomic context suggests that eventual rate cuts are likely.
Key factors to monitor include:
Unemployment data in the coming months.
Inflation trends to confirm stability or further declines.
Any changes in the Fed’s tone regarding rate policy.
Price Expectations:
In the short term, we could see the DXY reach 104.636, reflecting a retracement toward a key support zone.
In the medium to long term, the DXY is likely to target 101.917, aligning with major support from prior price structures and further confirming the bearish outlook.
If unemployment begins to rise and inflation remains under control, these targets become even more probable, reinforcing the alignment between technical and fundamental factors.
DXY Shorts from the daily supply at 104.200 back down.The dollar has broken significant structure to the downside, leaving a clean, unmitigated daily supply zone with an imbalance that adds validity to this point of interest. Once price reaches this level, I'll likely refine the zone and wait for a CHOCH on the lower timeframe.
If price moves down first, I’ll watch for it to enter the newly created 3-hour demand zone, which swept previous higher-timeframe structure. This could propel the dollar up to the supply zone.
Confluences for DXY Shorts:
Strong bearish momentum on the higher timeframe, breaking previous structure.
Significant liquidity to the downside.
A solid daily supply zone caused this move, with an imbalance below.
This pro-trend trade aligns with my other pairs.
P.S. I expect Monday to start slow, with consolidation before either zone is mitigated. We'll make our move from there.
DXY observations (short term bearish trend)DOLLAR OBSERVATIONS
As price continues its downward trajectory, it has shifted its trend to the downside, leaving behind clear supply zones. One of these zones was previously identified and respected as per last week's forecast. I anticipate this short-term bearish trend to persist until it reaches the 104.200 mark. At that point, I expect a bullish reversal to occur, especially considering the presence of an imbalance just above this level.
Additionally, with price currently in a downtrend, my bullish biases on GU and EU align accordingly. This correlation is logical until either of them reaches the supply zone on the daily chart, which should coincide with the same daily demand zone marked out on DXY.
good entry model in to be long in gbpaudWe have a change of character in 4 hours so we are going to look for purchases in (backwards) to the sales area so we have a lineup in 15 minutes to go shopping. I'm just waiting for the liquidity from Asia to be able to react in an order block of 30 minutes with confirmation. We enter.
DXY Shorts from 102.400 Down towards 101.000The DXY forecast remains bearish in my view; however, there is a notable strong bullish retracement occurring. I perceive this retracement as temporary, as the price is retracing back to a premium supply level. I anticipate a distribution to take place in either the 1-hour supply zone I've identified or...
Alternatively, if the price continues to climb higher, fully mitigating the imbalance, it may enter my preferred 14-hour supply zone, which previously caused a break of structure to the downside. Should the price decline without touching these two zones, I will then be on the lookout for a buying opportunity around 101.000.
Confluences for DXY dollar sells are as follows:
- Dollar is temporarily bearish due to the break of structures on the higher timeframe.
- Currently price has reacted off a demand so I can expect bullish pressure to get exhausted.
- Price is slowing down foreshadowing a potential wyckoff distribution to play out.
- Lots of liquidity still left below in the form trend line liquidity and major imbalances.
- Candlestick anatomy shows that price might have a bearish drop as its mitigated an imbalance above partially
P.S. While my current stance is bearish in the market, this minor bullish retracement appears temporary, and I anticipate the price to resume its downward trajectory. However, considering the presence of numerous imbalances, I prefer to observe price movements before deciding on my course of action.
Have a great trading week ahead guys!
DXY : Short Trade , 4hHello traders, we want to check the DXY chart. The price is moving in a descending channel and has pulled back to the indicated key level. If the price cannot break this level and this level plays the role of a resistance level, we expect the price to maintain its downward trend and the price will fall to around 100,700. Good luck.
DXY (Dollar) Shorts from 101.300 or 102.000My outlook for the dollar remains bearish, but it's currently in a bullish retracement phase triggered by the reaction at my identified 17hr demand (POI) from last week. I anticipate price to continue its upward movement to eventually reach a premium level. In this scenario, I'll be looking for selling opportunities around the 4hr supply zone or the 14hr supply at the top.
While the 4hr supply is still a possibility, it's not the optimal choice for sells due to its location within a trend line that I anticipate being taken out. Instead, I foresee a reaction at the 14hr supply, located within the 0.786 Fibonacci range and having caused a break of structure. Therefore, I'll be patiently waiting for some form of distribution to unfold once the bullish pressure is exhausted.
Confluences for DXY dollar sells are as follows:
- Dollar is temporarily bearish due to the break of structures on the higher timeframe.
- Currently price has reacted off a demand so I can expect bullish pressure to get exhausted.
- Price is slowing down foreshadowing a potential wyckoff distribution to play out.
- Lots of liquidity still left below in the form of equal lows and trend line liquidity.
P.S. Although I am currently bearish on the market, my overall sentiment is bullish. The recent reaction off the 17hr demand might spark an upward rally. Additionally, there's a 9hr demand zone where I anticipate another bullish reaction.
HAPPY NEW YEARS TO ALL OF YOU AND HOPE THIS YEAR BRING EVERYONE PROFITABILITY AND CONSISTENCY. LETS CATCH THESE PIPS!
DXY (Dollar Index) Shorts from 101.800 down to 100.800The outlook for the Dollar this week is a continuation of its bearish trajectory. With a recent downside break in structure, I anticipate a correction, expecting the price to retrace into the 14-hour supply zone.
Upon entering my Point of Interest (POI), I'll wait for price distribution and a change in character as a signal that the dollar is prepared for a decline. Additionally, I acknowledge the presence of imbalances above the supply, suggesting the potential for a break beyond this supply into a more premium area.
Confluences for Dollar Sells are as follows:
- This bias aligns with the current bearish trend that has been perpetuated.
- Lots of major trend lines, equal lows and asian lows below on the higher time frame.
- There's a14hr supply zone that has broken structure to the downside causing BOS.
- For price to maintain its bearish trend it must react off a supply to trigger another sell off.
P.S. While the dollar maintains an overall bullish stance on the higher time frame, it's only a matter of time before price sweeps liquidity and reacts strongly to a major supply. However, given the current bearish movement, It's advisable to follow the existing trend instead of opposing it for the time being.
If you guys have any interesting perspectives on this market, feel free to share down below!
DXY (Dollar index) Shorts down to 102.500While the overall trend for the dollar remains bullish, recent weeks have witnessed a notable increase in downward movement. This suggests a potential continuation of the bearish patterns, prompting me to seek pro-trend trades aligned with this recent bias. Notably, with the price already having mitigated a supply zone, an anticipated drop towards the target of 102.500 seems likely.
The formation of Wyckoff accumulation signals a possible breakdown to surpass Asian lows. Additionally, considering that the price has left a demand zone at the projected target, we can expect a potential reaction in this zone. This reaction could potentially lead to the creation of new highs and a temporary bullish trend.
Confluences for DXY Sells are as follows:
- Dollar has tapped into a 17hr supply zone that has caused a BOS to the downside.
- Theres liquidity to the downside in the form of Asian low and trendline liquidity.
- Recent trend for this market has been temporarily bearish so this is a pro trend trade.
- If price wants to continue going higher, there are unmitigated demand zones that price needs to come and fill.
P.S Although the price has established a new bearish trend, it's possible that this is a strategic move to eliminate the trendline liquidity lingering from previous bullish rallies. Given the overall bullish sentiment on the higher time frame, it wouldn't be unexpected to witness the dollar initiating a new trend to achieve fresh highs.