US Dollar Index holds steady following last week's choppy action. As economists at OCBC Bank note, a head and shoulders pattern could be forming. 

A head & shoulders pattern in the making?

“Bearish momentum on weekly chart intact and should underpin the broad bearish bias. Price action on weekly chart also exhibited a head & shoulders (H&S) pattern with neckline around 104.10.”

“We do not rule out consolidative play with risk of bounce as DXY approaches key support levels. Support at 104.1 (recent low, H&S neckline) and 102.15. But assuming what we are seeing is an eventual play-out of a H&S, then the textbook price objective of the breakdown should be somewhere closer to 95-96 levels.”

“Resistance at 105.75 (200DMA), 106 (21DMA) and 107.”