USD Ranging or Breaking?

With the FOMC decision slated in a couple of days there is plenty of promise for some directional volatility in its aftermath. The price action in the FXCM US Dollar Index has been worrisome over the past month and warns that a deeper correction could be unfolding in USD. Friday’s close below 11,925 technically triggered a minor head & shoulders top in the index that paves the way for a potential decline towards 11,700. However, there is significant risk that that the index is just testing the bottom of its multi-week range and I would prefer to see traction under the lows of the consolidation at 11,890 before adding to or initiating USD short positions.

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