Is the Dollar Index Forming a Significant Top?

All of the action in the DXY since mid-Jan is starting to form a very toppy pattern-- as in the head & shoulders variety top, with the neckline-support zone located in and around 93.25/15-- down into the area of the up-sloping 200-day EMA, now at 92.21.

In the event of a sustained breach of the above-mentioned key, multi-month-support zone, the optimal targets for the ensuing correction will point to 88, and then to 86.

Apart from the implications of such U.S. Dollar weakness on various sectors of the equity markets, we will have to keep an eye on the impact of a lower Dollar on commodity markets in particular.