DXY - Is a relief bounce to the 4-h FVG coming?

The US Dollar Index (DXY) has been in a clearly defined downtrend over the recent period, showing consistent lower highs and lower lows. During its latest downward move, the DXY formed a 4-hour Fair Value Gap (FVG), which aligns with a significant gap in price action. This confluence of technical factors marks a strong rejection area, and from a trading perspective, it presents an ideal zone to consider short positions, especially if bearish price action confirms the setup.

Currently, however, the DXY is sitting at a major support level. This level has historically acted as a demand zone, and given the extended move downward, a bounce or retracement to the upside is a realistic scenario. Traders should stay alert for signs of bullish momentum or reversal patterns, as the potential for a temporary recovery from this support is not unlikely before any continuation of the broader trend.

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