Dollar Index Eyes FVG Breakout Ahead of CPI

DXY 11/06 – Dollar Index Eyes FVG Breakout Ahead of CPI | Reversal Risk After 100.31?
The US Dollar Index (DXY) continues to consolidate within a rising channel on the H2 timeframe, with price tightening just ahead of a key macro event — the US CPI report. DXY is now approaching a critical Fair Value Gap (FVG) zone, where liquidity hunts and potential reversals become highly probable.

🌐 MACRO OUTLOOK & MARKET SENTIMENT
📌 US CPI (June 12):
The main macro driver for DXY this week.

A hotter-than-expected print → strengthens the Fed’s hawkish stance → DXY likely to spike.

A weaker-than-expected CPI → boosts rate cut expectations → downside pressure on DXY.

📌 Risk Sentiment:
Institutions are readjusting their exposure ahead of CPI and FOMC. This has caused DXY to hover near EMA89 — a sign of indecision.

📌 Cross-asset Flows (Bonds & Gold):
Treasury yields are stable, but surprises in CPI could lead to capital rotation between gold and USD, increasing volatility in XAUUSD and DXY simultaneously.

📈 TECHNICAL ANALYSIS
Trend Structure:
DXY is following a clean ascending channel on H2, with higher lows respecting the lower trendline.

EMA Confluence (13–34–89–200)
Price is consolidating near EMA89 and below EMA200 (99.40), forming a neutral short-term bias.
A clean breakout above EMA200 could trigger acceleration into the FVG zone.

Key FVG Zone (H2):
99.63 – 100.31 is an unfilled Fair Value Gap.
This zone may act as a magnet for price before any meaningful rejection or breakout.
Potential Reversal Area:

A rejection at 100.31 could trigger a sharp pullback toward the liquidity zone around 98.68.

🧠 STRATEGIC OUTLOOK
CPI will set the tone for DXY’s mid-term trend.

Watch the 99.63 – 100.31 FVG zone for liquidity sweeps and potential rejection.

Wait for confirmation, not prediction — especially in macro-sensitive environments.