Technical Analysis of the US Dollar Index

The Dollar Index is moving in a downtrend on the weekly timeframe. On Monday, the index declined from the 98.35 level, targeting the WFVG zone as mentioned in the previous report. We currently observe a bounce from that area. Generally, the manipulation of the weekly candle is likely over, and a bullish move is expected today. During the potential upward move, prices will face two FVG zones on the 4-hour timeframe. These areas are important but must be strongly broken to allow a smooth continuation upward. If that happens, the weekly trend may shift to bullish.

Key Economic Event

Jerome Powell’s speech today is considered the most important event on the market agenda, especially with the absence of strong U.S. data.
Traders are watching for any clues regarding the Fed's direction on interest rates and inflation.
If Powell hints at easing inflation or a dovish stance, that may weaken the dollar and support gold and equities.
However, if he maintains a hawkish tone and expresses concern about inflation, the dollar may strengthen while risky assets come under pressure.
Every word counts today, and any phrase from Powell could trigger sharp volatility across currencies, commodities, and global indices.

Liquidity Levels

Buying from current levels is possible, but the risk is high. It is preferable to wait for a 4-hour candle close above 98.35 to confirm further upside potential. If that happens, targets would be set at the 98.95 and then 99.45 liquidity levels.

Invalidation Scenario

The bullish scenario would be invalidated if a 4-hour candle closes below the 97.40 level.