The US dollar index ($DXY) remains in a major (long-term) downtrend on its monthly chart with a downside target near 99.00. The index extended its trend to a low of 100.79 during April, and with monthly stochastics still above the oversold level of 20% there is time and space for the USDX to move lower. Theoretical Positions: Traders may have shorted the dollar near the September and October closes of 112.00.
The euro (^EURUSD) remains in a major uptrend with the next upside target near 1.12746. The euro extended its trend to a high of 1.19047 during April with monthly stochastics still partially below the overbought level of 80%. This means there is time and space for the euro to move higher. Theoretical Positions: Traders could be long the euro from the September 2022 close of 0.98024 based on a bullish crossover by monthly stochastics at the end of that month. Additional longs might’ve been established during November 2022 when the euro moved to a new 4-month high.
The euro/Canadian dollar (^EURCAD) extended its major uptrend to a high of 1.51118 during April. Monthly stochastics remain well above the overbought level of 80% meaning the spread could soon establish a long-term top technical top. We need to keep an eye out for a reversal pattern to develop. Theoretical Positions: Traders could be long from the August 2022 close of 1.31904. Additional longs might’ve been established with the new 4-month high beyond 1.36955 during November 2022. This puts the average long near 1.3443. Stops could be placed below the January 2023 low of 1.4236.
The Canadian dollar (^CADUSD) remains in a major uptrend on its monthly chart, despite its lower monthly close. Initial resistance is at the previous 4-month high of 0.75398 from this February. Theoretical Positions: Traders could be long from the October 2022 close of 0.73395 with a stop below the March 2023 low of 0.72146. Additional longs could be established near the March settlement of 0.73975, putting the average long near 0.73685.
The Brazilian real (^BRLUSD) posted a bullish breakout, as expected in last month’s analysis. Theoretical Positions: New long positions were established when the real took out its previous high of 0.20214 from February. The upside target is near the April 2022 high of 0.21773. Sell stops would be placed below the previous 4-month low of 0.18246 from January 2023.
