The USDollar seems a lot overvalued and expensive on a 10years cycle, a reasonable depreciation of the USDollar going forward would balance three main factors: the attractivity of US Goods exports, which could potentially be beneficial to the balance of trade, on the other hand, way less expensive USDollar, could be beneficial for U.S. multinationals generating revenues globally, meanwhile making to G7 and EM currencies U.S. goods and financial flows much reasonable, given also the necessity to finance a very large Fiscal deficit; a less expensive USDollar could then become beneficial to the narrowing of the USA twin deficit.
The Dollar Index chart provides a clear channel range, the DXY 90.72 intraday clearly overvalued compared to 2010/2012 on a ten years cycle comparison. Technicals give a clear sell signal, where the DXY price trendline has retraced below the IKH Senkou A/B span and below the 50 months M.A., meanwhile the MACD has generated also a consistent Sell signal with both lines below the histogram, the RSI 37.91 Sell signal, still not oversold.
The Dollar Index could then see the price trendline drifting to DXY 86.80 on a 200 months M.A., while going forward would possible to see a DXY 80.
The USD/CAD chart below also provides a clear major double top pattern, where the currencies crossover price trendline has seen the technical sell signal, consolidation of a downtrend, pricing below the IKH Senkou A/B nuage, while also the Tenkan line has generated a bear cross, sell signal, going below the Kijun line and below the 50 months M.A., MACD oscillator generated a sell signal, The RSI also in a downdrift.
The nearest technical level that USD/CAD would test can be USD/CAD 1.2480 near the 100 months M.A., while becomes possible to have a -5,9% depreciation of the U$Dollar, which would theoretically see USD/CAD 1.20<1.2250 exchange rate level.