Currencies

The US dollar index ($DXY) consolidated during February. The greenback remains sharply oversold on its long-term monthly chart, a technical reading that could be indicating a move to an uptrend over the coming months. What would the fundamental catalyst be? At the end of February the Fed fund futures forward curve was indicating the next FOMC rate cut would not be seen until July, with another possible in October (see Monthly Analysis: Financials). Theoretical Positions: Investors may still be short the USDX based on the January move to a new low. We need to keep an eye on both the monthly and intermediate-term weekly chart for a potential change in trend.

The Euro (^EURUSD) also consolidated during February, comfortably holding within the January range before closing settling marginally lower. Theoretical Positions: Investors are still long the euro, and likely added positions as it took out its previous high of 1.19186 during January. As with the US dollar, we need to keep an eye out for a possible intermediate-term trend change on the euro’s weekly chart.

The euro/Canadian dollar (^EURCAD) still looks to be in a the early stages of a major (long-term) downtrend. After completing a bearish spike reversal during October 2025, the currency has consolidated below that month’s high of 1.64678. Theoretical Positions: Short positions could’ve been established near the October settlement of 1.61659 with sell stops to establish additional positions below the December low of 1.60618. The currency closed February at 1.61205.

The Canadian dollar (^CADUSD) remains in a major uptrend. Theoretical Positions: Investors would be long the Canadian dollar from the close of February 2025 at roughly 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. The Canadian dollar closed February at 0.73296.