Key Trading Zones for Dollar Index and GBPUSD: Bullish and Bearish Scenarios

Technical Analysis

Dollar Index (DXY), H4

Bid Zones (Sell): 106.84, 107.04, 107.51
Ask Zones (Buy): 106.21, 105.93, 105.00

After retracing over 50% of the Fibonacci levels and reaching a demand zone around 105.93, the price could resume its upward trend if it holds above the local demand zones between 105.94 and 106.21. If this scenario materializes, a rebound above 106.44 is expected, targeting 106.84 and 107.04 as the next supply zones. Breaking these could lead to the next liquidity zone at 107.51.

In this context, major pairs may see renewed USD gains. However, if the price breaks below 106.00/105.94, the bearish correction could extend towards 105.43, a pivot level for bulls. The macro-validated support stands at 104.17, indicating that as long as this level holds, the bullish trend remains intact.

GBPUSD, H2

Bid Zones (Sell): 1.2643

Ask Zones (Buy):1.2665, 1.2650, 1.2571 y 1.2550

After the latest price surge towards 1.2695, a moderate pullback was observed to the last key zone at 1.2649, which acted as a liquidity zone for buyers. This spurred buying activity above the POC (Point of Control) from earlier sessions at 1.2665, driving the price towards 1.2680. Breaking this zone would breach the resistance at 1.2695, fueling further gains towards 1.27, 1.2715, and the next supply zone around 1.2743.

On the other hand, failure to break above 1.2695 could indicate weakness and a potential bearish reversal, especially if the price falls below 1.2660/1.2650. This could pave the way for selling towards 1.2613, with further downside targets at 1.2571 and 1.2549 in the coming days.

Technical Summary

Bullish Scenario: Buy after breaking above 1.2695, targeting 1.2715 and 1.2743. Use a 1% capital stop-loss with a low lot size to allow room for market fluctuations.

Bearish Scenario: Sell below 1.2650, targeting 1.2613, 1.2590, 1.2571, and 1.2550.

Note: Always wait for a Reversal/Exhaustion Pattern (PAR) formation on the M5 timeframe before entering trades in the indicated key zones. Learn how to spot PARs here: https://t.me/spanishfbs/2258.

POC Explained:

Point of Control (POC):

The level or zone with the highest volume concentration. If this level previously triggered a bearish move, it is considered a sell zone and forms resistance.

If it spurred a bullish move, it is regarded as a buy zone and usually acts as support.

Trading foreign currencies on margin involves significant risks and may not be suitable for everyone, as high leverage can increase both potential gains and losses. Before entering the foreign exchange market, it is essential to evaluate your investment goals, personal experience, and risk tolerance.

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Author: Tibisay Ramos

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