For a trader that trades GBPUSD like me, it is important to analyze the direction of
DXY
because
DXY
is negatively correlated with $GBPUSD. Knowing the direction of DXY is an additional confluence in trading $GBPUSD.
Here is how I analyze
DXY
direction.
Today's
DXY
direction analysis.
- DXY is showing a downtrend move.
- It took the sell side liquidity with equal low (SSL D TAKEN line) then moved up.
On its way up,
- it filled fair value gaps (purple shades). 1 fair value gap is not yet fully filled
- it took the 78.6% Fib level, which is the deepest optimal trade entry (OTE)
LONG bias: it is possible for DXY to continue moving up because there is a daily bearish order block just above (BearOB D line)
SHORT bias: it is also possible that
DXY
could reverse back down from here because it is showing signs of rejection of the 78.6% Fib level.
For this reasons, my bias for
DXY
is NEUTRAL.
Now it's time to analyze
GBPUSD
DXY
because
DXY
is negatively correlated with $GBPUSD. Knowing the direction of DXY is an additional confluence in trading $GBPUSD. Here is how I analyze
DXY
direction. Today's
DXY
direction analysis. - DXY is showing a downtrend move.
- It took the sell side liquidity with equal low (SSL D TAKEN line) then moved up.
On its way up,
- it filled fair value gaps (purple shades). 1 fair value gap is not yet fully filled
- it took the 78.6% Fib level, which is the deepest optimal trade entry (OTE)
LONG bias: it is possible for DXY to continue moving up because there is a daily bearish order block just above (BearOB D line)
SHORT bias: it is also possible that
DXY
could reverse back down from here because it is showing signs of rejection of the 78.6% Fib level. For this reasons, my bias for
DXY
is NEUTRAL. Now it's time to analyze
GBPUSD
