Dollar Index Awaits Breakout Ahead of Fed Decision

Currently, the Dollar Index is moving sideways, showing a clear lack of directional momentum. On the chart, this consolidation takes the shape of a symmetric triangle, marked with blue lines, reflecting shrinking volatility and growing tension between buyers and sellers. Price is coiling within this pattern, and this kind of technical setup often precedes a strong breakout. The triangle represents a balance between opposing forces — bullish traders defending higher levels and bearish traders capping any upward momentum. The closer we move toward the apex of the triangle, the more likely a decisive move becomes.

From a trading perspective, the approach here is straightforward. A breakout to the upside — confirmed by a daily close above the upper blue line — would signal that bulls are regaining control, opening the door for a stronger dollar recovery in the coming days. Conversely, a breakout below the lower boundary would mark a continuation of the broader weakening trend, providing a sell signal and possibly accelerating the decline. Given the proximity of the Fed’s decision, volatility will spike regardless of the outcome, and traders should be prepared for sharp, whipsaw-style movements.