The inverse relationship between the U.S. dollar and most commodities is no secret so currently approaching crossroads the greenback is of extra importance right now.

The improved economy gets a lot of credit for what I see as the resurgence of industrial assets such as base metals. However, I’ve been less sanguine about gold and precious metals. The conundrum is that despite what looks like a nicely warm economy, inflation remains subdued; just look at long-term bond yields. If the economy finally looks ready to emerge after bumping along the bottom for so many years we should see some upward pressure on prices.

Then there is the performance of gold itself. In a recent piece, I questioned the bullish argument based purely on technicals. There was just too much overhead resistance to overcome. I would only get more excited about it when – and if – gold price broke out to the upside.

Right now, the U.S. dollar index is in a two-month rally. It’s not smooth and arguably it is not much more than a technical reaction to the prior multi-month decline. Still, there are some items on the chart that speak to the bullish side.

For starters, the past two months of trading left what appears to be a developing inverted head-and-shoulders pattern. For the less chart-geeky among us, it looks like a small upside reversal pattern. Downside momentum readings waned. And it all takes place at major support going back to the start of the decade. In other words, the bullish setup is in place awaiting that final “all clear” buy trigger.

Indeed, a weekly chart shows a bullish shift in momentum, as well. The daily chart shown here simulates that change using the September 2017 low as the first reference point.

Go bulls, right? Not so fast.

Just as gold has its hurdle so, too, does the dollar. There is resistance just overhead from that September low as well as last month’s high. But more importantly, the trendline guiding the most recent dollar bear market lower from a year ago looms very large overhead. In fact, given its rate of descent, it should meet existing chart resistance in the 91.00-91.25 area by month’s end (the dollar traded a smidge above 90.00 this morning (Monday, March 12).

It is quite possible that the bullish-leaning inverted head-and-shoulders is really a bearish-leaning flag pattern. What’s the difference? There is not a whole lot of difference other than a few subtle high and low alignments.

As with all technical patterns, we glean clues from their shapes and locations in trends but none of them tell us exactly what to do until their won upper or lower borders break. Only then do we make the call that a new directional move begins. And even then, nothing is 100%.

The bottom line here is that the dollar now approaches a critical juncture where we will likely see the definitive breakout to the upside or continuation of the bearish trend. Yes, this is a case of if it does not go up then it will go down and I can say that because I make no predictions which one will happen. I merely point out that the market should tell us what it wants to do soon.

We do give the larger trend the benefit of the doubt so there is a slight nod to the bears here. If they do win, then I’d start to look for that gold breakout. But for now, all I can do is wait to see how the market tips its hand. In either case, the dollar should be less boring in a few weeks.