I waited until the official end of May before posting my monthly analysis of currencies since markets outside the US were open, and trade in currencies never takes a day off. The Canadian dollar (loonie) extended its major (long-term) uptrend to a high of 0.83232 during May, putting it at its highest level since May 2015. The continued climb of the loonie has occurred despite monthly stochastics already showing a sharply overbought situation, moving closer to 100% at the end of the month. This gives the market a feeling of being top-heavy, with a lot of space between where the loonie is priced on June 1 at 0.83126 and support at the previous 4-month low of 0.77704 (dashed red line). We need to keep an eye out for a potential reversal pattern during June, with the most likely a spike reversal or 2-month reversal by the end of the month.
