I closed my sells earlier today and starting to look for buys now.
DXY has been bullish the last couple days but it looks like it may be topping out. It is nearing the structure highs, 0.612 fib zone (from the weekly perspective) and a key level which I am expecting to resist for this idea.
For DXY , keep an eye on 92.5 area and 92.665 area.
EURUSD on the other hand is currently at a support level creating a double bottom pattern. If this area holds, we could see the price bounce up from here.
Alternatively, the more likely scenario, further weakness could create a deeper pullback to the 0.786 fib zone where the support is much stronger and coinciding with multiple areas of confluence such as HTF bearish structure & LTF bullishstructure support as well as a monthly key level support.
Invalidation: A daily candle close below 1.174 would invalidate this idea as I am expecting the bullish structure to support the price.
Also note, I haven’t analyzed the latest COT data to confirm if the data is in favor of this idea or not. Regardless, this trade could last several weeks.
Let me know your thoughts.