US Interstate Highway 94 connects Port Huron, Michigan to Billingsley, Montana, crossing through Detroit, Chicago, Milwaukee, and Minneapolis along the way. Around this time of the year, it marks the informal line between cold weather and bitterly-cold, get-hypothermia-if-you’re-outside-without-a-moose-pelt-on cold weather. In other words, you don’t want to be north of 94 during the winter if you can avoid it.

It’s the same situation for dollar bears and the 94.00 level on the dollar index. The widely-followed indicator of dollar strength broke impressively through that key level two weeks ago, confirming a textbook 3-month inverted head-and-shoulder pattern. This classic technical formation shows a transition from a downtrend (lower highs and lower lows) to an uptrend (higher highs and higher lows) and is often seen at major turning points in the market.

Last week, the dollar index consolidated its breakout amidst a busy week of economic data, consistently finding support on brief dips into the mid-94.00s. With the greenback rallying again today, the world’s reserve currency is on tap for its highest close in nearly four months. The traditional “measured move” objective of the pattern would project a move to above 97.00 on the dollar index, equivalent to a drop toward the mid-1.1200s on EUR/USD. It’s also worth noting that the 200-day moving average, a key trend indicator, comes in around 97.00 as well.

That said, dollar bulls shouldn’t start counting their proverbial eggs before they hatch. One paradoxical reason for caution toward the greenback is that the inverted head-and-shoulders is a bit too perfect; rarely do you see a picture-perfect technical pattern evolve exactly as the textbook suggests.

More saliently, there may be little in the way of positive economic catalysts for the US economy. A Federal Reserve rate hike in December has been nearly fully priced in, with fed funds futures traders pricing in a 97% chance of an increase according to the CME’s FedWatch tool. With an inevitable period of transition in the leadership of the Fed early next year (exacerbated by New York Fed President Dudley’s recently-announced retirement), the central bank could well remain on hold throughout the first half of next year.