DXY Possible Dip Before Further Up
Updated
🔰 Pair Name : DXY
🔰 Time Frame : 4H
🔰 Scale Type : MID Scale
🔰 Direction : SELL
During the recent correction in dollar strength that began last week, the DXY showed a rally to the 101.5 area without undergoing a proper retest to the downside. Today, the price reached the 4-hour supply zone above the 101.111 area. There is potential for a retest to the downside at this area, towards the previous 4-hour demand zone at the 100.8-100.7 area, to fill the imbalance in order to have enough liquidity to go further up.
As professional traders, it is crucial to keep a close eye on the DXY - the U.S. Dollar Index. This index serves as a key metric in measuring the USD's value against a basket of major currencies, acting as a benchmark for the strength or weakness of the USD. 💹💲
Here's how the movements of the DXY can impact currency pairs and gold prices:
1.USD Currency Pairs (e.g., EURUSD, GBPUSD, AUDUSD):
1️⃣ Inverse relationship: A strengthening DXY indicates that the USD is gaining strength against the basket of currencies, leading to weaker USD currency pairs.
2️⃣ Positive correlation: Conversely, a weakening DXY suggests that the USD is losing strength against the basket, resulting in stronger USD currency pairs.
2.JPY Currency Pairs (e.g., USDJPY, EURJPY, AUDJPY):
The relationship between the DXY and JPY pairs is not as direct as with USD pairs, but there may still be some correlation due to the impact of the USD on overall market sentiment. For example, a stronger DXY might prompt investors to seek safe-haven assets like the Japanese yen, potentially strengthening the JPY pairs. 🛡️➡️💹
🥇Gold Price:
1️⃣ Inverse relationship: Gold is often considered a safe-haven asset, and it typically moves in the opposite direction of the USD. A stronger DXY indicates a stronger USD, making gold more expensive for holders of other currencies. Consequently, this can lead to a decrease in gold demand and a potential decline in gold prices. 📉➡️🏅
2️⃣ Positive correlation with JPY pairs: As mentioned earlier, JPY pairs may exhibit some correlation with the DXY due to risk sentiment. If the DXY strengthens, investors may seek safe-haven assets like the Japanese yen, potentially exerting upward pressure on gold prices as well. 💹➡️🏅
It is essential to keep in mind that correlations can change over time, and other factors beyond the DXY can influence assets such as US30 and XTIUSD (Crude Oil). As professional traders, always consider multiple factors and stay updated with current information to make informed decisions. 🧠🔄 Continuous learning and research are crucial to enhance your understanding and excel in trading. Happy trading! 📚🌟 #DXY #MarketAnalysis #FinancialEducation
🔰 Time Frame : 4H
🔰 Scale Type : MID Scale
🔰 Direction : SELL
During the recent correction in dollar strength that began last week, the DXY showed a rally to the 101.5 area without undergoing a proper retest to the downside. Today, the price reached the 4-hour supply zone above the 101.111 area. There is potential for a retest to the downside at this area, towards the previous 4-hour demand zone at the 100.8-100.7 area, to fill the imbalance in order to have enough liquidity to go further up.
As professional traders, it is crucial to keep a close eye on the DXY - the U.S. Dollar Index. This index serves as a key metric in measuring the USD's value against a basket of major currencies, acting as a benchmark for the strength or weakness of the USD. 💹💲
Here's how the movements of the DXY can impact currency pairs and gold prices:
1.USD Currency Pairs (e.g., EURUSD, GBPUSD, AUDUSD):
1️⃣ Inverse relationship: A strengthening DXY indicates that the USD is gaining strength against the basket of currencies, leading to weaker USD currency pairs.
2️⃣ Positive correlation: Conversely, a weakening DXY suggests that the USD is losing strength against the basket, resulting in stronger USD currency pairs.
2.JPY Currency Pairs (e.g., USDJPY, EURJPY, AUDJPY):
The relationship between the DXY and JPY pairs is not as direct as with USD pairs, but there may still be some correlation due to the impact of the USD on overall market sentiment. For example, a stronger DXY might prompt investors to seek safe-haven assets like the Japanese yen, potentially strengthening the JPY pairs. 🛡️➡️💹
🥇Gold Price:
1️⃣ Inverse relationship: Gold is often considered a safe-haven asset, and it typically moves in the opposite direction of the USD. A stronger DXY indicates a stronger USD, making gold more expensive for holders of other currencies. Consequently, this can lead to a decrease in gold demand and a potential decline in gold prices. 📉➡️🏅
2️⃣ Positive correlation with JPY pairs: As mentioned earlier, JPY pairs may exhibit some correlation with the DXY due to risk sentiment. If the DXY strengthens, investors may seek safe-haven assets like the Japanese yen, potentially exerting upward pressure on gold prices as well. 💹➡️🏅
It is essential to keep in mind that correlations can change over time, and other factors beyond the DXY can influence assets such as US30 and XTIUSD (Crude Oil). As professional traders, always consider multiple factors and stay updated with current information to make informed decisions. 🧠🔄 Continuous learning and research are crucial to enhance your understanding and excel in trading. Happy trading! 📚🌟 #DXY #MarketAnalysis #FinancialEducation
Trade active
Note
Note
next supply level aheadNote
Note
Price respect the fair gap value, Dxy is dippingNote
Note
Beautiful tradeTrade closed: target reached
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.