FX.co ★ USDX technical analysis for January 27, 2016

The US dollar index is above critical support levels as it continues to trade sideways waiting for the FOMC rate decision and Fed chairman Janet Yellen's speech.

Red lines - upward sloping wedge

The price continues to trade inside the upward sloping wedge. It is above the Ichimoku cloud in the 4-hour chart, but has broken below the kijun- and tenkan-sen indicators giving us a bearish signal. A breakout below the cloud and out of the wedge will also be a clear sell signal.

In the weekly chart, we see the weekly candle testing the weekly tenkan-sen (red line indicator) support. If prices fall below it, we should expect the index to move towards the kijun-sen (yellow line indicator) and weekly cloud support. So, all eyes are on the Fed's decision tonight.