The US dollar index ($DXY): The 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. The September high was 101.61, just off the long-term mark of 101.80 from June 2026 before closing the month at 101.45, up 2.02 for the month. The Index should continue to firm on rising US interest rates both short-term and long-term (see Monthly Analysis: Financials). Theoretical Positions: Investors would’ve gone long the Index this past March at the new 4-month high near 100.40.
The Euro (^EURUSD): The euro still looks to be in a major downtrend that was confirmed as it posted a new 4-month low during March 2026. The 50% retracement level of the previous major uptrend is down at 1.11291. It should be noted monthly stochastics are indicating the euro is long-term oversold. 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 closed September at 1.13298, down 0.02876 (2.48%) for the month.
The Euro/Canadian dollar (^EURCAD) continued to consolidate during September before closing at 1.61243, up 0.19% for the month. In October, the previous 4-month low is 1.60010 from September with sell orders possibly below that level. 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 Canadian dollar (^CADUSD) The loonie still looks to be in a major downtrend after falling to a low of 0.70240 during September and closing at 0.70261, down 2.65% for the month. The previous 4-month low is 0.70186 from June. 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. Additional sell orders could be placed below the previous 4-month low from this past June.
The Brazilian real (^BRLUSD) consolidated during September before closing at 0.19328, up 0.23% 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. Additional sell orders could be placed below the previous 4-month low of 0.19060 from August.
