The US Dollar Index (DXY) depreciated a third session by 0.5% to 109.62, closing below 110 for the first time since 26 October. As economists at DBS Bank note, DXY has a potential head-and-shoulders formation.

This week could well be critical for the USD’s uptrend

“Investors are betting that the US mid-term elections will hurt the USD and bolster equities if the Republicans wrest control of one or two houses of Congress from the Democrats.”

“To extend its downside, the DXY needs to break below 109.50, the neckline of a potential head-and-shoulders formation.”

“USD bears will be encouraged if the support at 108.90, its 100-Day Mmoving Average (MA), is taken out.”

“This week could well be critical for the USD’s uptrend.”