Both FX indices have printed bullish-coloured Spinning Top weekly candles ahead of next week’s FOMC. The DXY might have a technical edge though given it is displaying two different bullish-reversal patterns. As always, watch for momentum-based trend line breakouts.

DXY

DXY weekly (condensed): the index remains below the 10-yr bear trend line:

DXY weekly: the bullish-reversal Descending Wedge trend lines have been adjusted due to the declining momentum on the daily chart time frame. There is a new bullish-reversal style pattern on display here though; that of a Morning Star pattern. It may not be a classic or text-book rendition of the pattern but looks very similar so should not be ignored:

DXY daily: watch for any momentum-based trend line breakout:

DXY 4hr: not a lot of momentum on this time-frame either so watch for any uptick on the ADX:

EURX

EURX monthly: the index is holding above the recently broken 12-yr bear trend line but is currently mired by the monthly Ichimoku Cloud. Any breakout from this resistance zone could take a few months but keep an eye on this chart. There has not been a bullish monthly candle close above the monthly Ichimoku Cloud since prior to 2013 so any new close above this region would be rather significant.

EURX weekly: a bullish-coloured Spinning Top weekly candle BUT still holding above the recently broken 12-yr bear trend line:

EURX daily: has really just chopped sideways for the last few weeks. Note the declining momentum. Will FOMC be a game-changer here?

EURX 4hr: watch for any new momentum-based trend line breakout:

FX Index Alignment: the FX Indices are not aligned at the moment.

• EURX: is just below the 4hr Cloud but above the daily Cloud so currently not aligned and prone for potential choppy EUR$ price action.
• USDX: is above the 4hr Cloud but below the daily Cloud so currently not aligned and prone for potential choppy USD$ price action.

Calendar: the main risk event for next week is FOMC: