Dollar Index: Range-Bound But Bullish? 3 Scenarios to Watch

The Dollar Index (DXY) is in a global range, within which there is a bullish daily order flow. This flow is manifesting as a sequential mitigation of, and reversal from, imbalances and manipulation zones.

On November 5th, a deviation above the global range occurred, sweeping external liquidity. This was engineered by a manipulation in the form of a Daily Order Block. Following this, the index began a corrective decline and is now approaching a POI (Demand Zone) and potential Fibonacci reversal levels.

Long positions can be considered from one of these levels, targeting the upper boundary of the range (the mitigation of the Daily OB).

• SCENARIO 1: Requires price to find acceptance above the 50% level upon reaching it and mitigating the Demand Zone.
  
  
• SCENARIO 2: If this level is broken, the next 61.8% level (also inside the Demand Zone) may act as support.
  
  
• SCENARIO 3: If this level is also broken, a liquidity sweep of the Oct 28 low is highly probable, which would be accompanied by a test of the 78.6% Fib level.
  

The entry condition for a long setup from each level is confirmed acceptance above it and the beginning of a bullish order flow on a lower timeframe.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

The principles and conditions for forming the manipulation zones I show in this trade idea are detailed in my educational publication, which was chosen by TradingView for the "Editor's Picks" category and received a huge amount of positive feedback from this insightful trading community. To better understand the logic I've used here and the general principles of price movement in most markets from the perspective of institutional capital, I highly recommend checking out this guide if you haven't already. 👇

P.S. This is not a prediction of the exact price direction. It is a description of high-probability setups that become valid only if specific conditions are met when the price reaches the marked POI. If the conditions are not met, the setups are invalid. No setup has a 100% success rate, so if you decide to use this trade idea, always apply a stop-loss and proper risk management. Trade smart.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
If you found this analysis helpful, support it with a Boost! 🚀

Have a question or your own view on this idea? Share it in the comments. 💬

► Follow me on TradingView for timely updates on THIS idea (entry, targets & live trade management) and not to miss my next detailed breakdown.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~