The US dollar index ($DXY): Despite posting a lower monthly close at the end of July, down 1.28, the US dollar index still looks to be in a major (long-term) uptrend that was confirmed as the greenback posted a new 4-month high during March 2026. However, it is not a clear, or particularly strong trend. Recall the June high of 101.80 was a test of the 50% retracement level of the previous major downtrend at 101.99. Theoretical Positions: Investors would’ve gone long this past March at the new 4-month high near 100.40. The Index closed July at 99.91.
The Euro (^EURUSD) extended consolidated during July, closing the month at 1.1529, up 0.01075 for the month. The euro still looks to be in a major downtrend after posting a new 4-month low during March, then again during June as it took out the March mark of 1.14111. The 50% retracement level of the previous major uptrend is down at 1.11291. Theoretical Positions: Investors are either short the euro near 1.14689 (March 2026) or near 1.14110 (June 2026). If short at both levels, the average position would be roughly 1.144.
The Euro/Canadian dollar (^EURCAD) posted a bearish outside month during July and remains in a major downtrend. Based on Elliott Wave analysis, the ^EURCAD looks to be completing a Wave B (second wave) rally within the 3-wave downtrend pattern. Theoretical Positions: Short positions could’ve been established near the October 2025 settlement of 1.61659 with additional positions below the December low of 1.60618. This puts the average short position at roughly 1.61135. The July close was at 1.61593.
The Canadian dollar (^CADUSD) consolidated during July, but still looks to be in a major downtrend after posting a new 4-month low during June. The loonie closed July at 0.71323, up 1.3% for the month. Theoretical Positions: Investors would’ve liquidated long positions from the close of February 2025 (0.69125), adding positions along the way as the loonie took out previous high marks, including January above the previous peak of 0.73854 from June 2025, below the previous 4-month low of 0.71604. New short positions would’ve been established at the same price.
The Brazilian real (^BRLUSD) consolidated during July before closing at 0.19657, up 1.8% for the month. I still see the real in a major downtrend following its key reversal during May, a pattern that coincided with a bearish crossover by monthly stochastics above the overbought level of 80%. A test of the May high would be considered a Wave B (second wave) rally with the 3-wave downtrend. Theoretical Positions: Investors long near the January 2025 settlement of 0.17188, based on a bullish 2-month reversal, would’ve liquidated those positions near the May settlement of 0.19785 locking in a gain of approximately 0.02597. New short positions were established at the same May settlement price.
