The US dollar index ($DXY): There continues to be no consistent trend with the US dollar index as it closed February at 104.21, down 3.40 for the month. This was the third consecutive lower monthly close. There is no US Federal Open Market Committee meeting during April 2025. However, it will be interesting to see what the greenback does when the US president’s “Liberation Day” rolls around on Wednesday, April 2. Theoretical Positions: If long-term investors bought near the November close of 105.78 in early December based on that month’s new 4-month high, these positions might’ve been lifted near the January settlement of 108.37 in early February based on January’s completion of a bearish spike reversal. Investors are likely on the sidelines at this time.
The Euro (^EURUSD): The flip-side of the US dollar index is the euro. Here we see a new low of 1.017766 was posted during January before the euro closed at 1.03595, up fractionally for the month. This coincided with a bullish crossover by monthly stochastics below the oversold level of 20%. From a technical point of view, the euro both signaled (stochastics) and confirmed (reversal pattern) a new major uptrend. Theoretical Positions: It’s possible long-term investors sold the euro during November, either at the breakout point of 1.078 or the November settlement of 1.08836 during in early December. If so, these positions would’ve been bought back and new longs established near the January close of 1.03595 with sell stops below the January low of 1.01776. The euro closed March at 1.08152, up 0.04389 for the month It’s also possible, given the unstable political situation in the US, the euro could take center stage from the US dollar.
The euro/Canadian dollar (^EURCAD) broke out if its major sideways trend during March, spiking to a high of 1.58570 before closing at 1.55624. Theoretical Positions: Buy orders would’ve been filled above the previous 4-month high of 1.51711 during March, with sell stops now below the previous 4-month low of 1.46854 (January 2025).
The Canadian dollar (^CADUSD) consolidated during March after completing a bullish key reversal on its monthly chart during February. The previous activity confirmed a move to a major uptrend. This also coincided with monthly stochastics establishing a bullish crossover below the oversold level of 20% meaning the loonie both signaled (stochastics) and confirmed (reversal pattern) the new long-term trend. Theoretical Positions: Investors would’ve bought back short Canadian dollar positions near the February settlement of 0.69125 and gone long at the same level. Sell stops would be placed below the February low of 0.67604.
The Brazilian real (^BRLUSD) extended is uptrend to a new 4-month high during March, taking out the previous mark of 0.17739 from November 2024. Theoretical Positions: Investors likely bought at the new 4-month high, putting the position at 0.17740. The real closed March at 0.17529, up 0.00539 for the month. Previous short positions might’ve been covered near the January settlement of 0.17118 based on what looked to be a bullish 2-month reversal.
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