DXY: Consolidation, Liquidity Hunts, and the Next Macro MoveU.S. Dollar Currency IndexTVC:DXYmelikatrader94Hi! The US Dollar Index (DXY) is sitting at a critical macro inflection point on the weekly chart, currently trading around 101.109. After breaking down below a massive weekly support level (now acting as a Flip Area around 100.175), the index has entered a prolonged consolidation phase right in the middle of a major descending channel. What makes the current price action highly interesting is the clear liquidity hunt on both sides of this range. We saw a clean sweep of the range lows near 96.00, followed by a recent aggressive push to hunt the buy-side liquidity above the range highs around 101.20. With the liquidity cleared on both ends, DXY is gearing up for its next directional leg. Here are the two primary structural scenarios playing out. Scenario 1: Direct Rejection & Drop (Immediate Bearish Continuation) The Setup: The recent upward push is treated purely as a fakeout/liquidity hunt to grab stop-losses above the consolidation range. Price Action: Price fails to sustain any weekly closes above the current level and immediately starts breaking back inside the range. Target: A direct structural sell-off heading down toward the macro Target Area at 94.626, aligning perfectly with the lower boundary of the descending channel. Scenario 2: Extended Pullback to Supply before Drop The Setup: Instead of an immediate sell-off, DXY builds enough short-term momentum from the liquidity sweep to fuel a deeper corrective rally. Price Action: Price extends upward to test the major overhead Supply & Demand (S&D) zone at 103.157, which lines up with previous structural breakdowns. Target: After tapping this strong macro supply zone and mitigating resting orders, the index experiences a heavy rejection, ultimately dropping back down to fulfill the final 94.626 macro target. I’m excited to announce that I’m now a Brand Ambassador for AvaTrade!