Dollar Index pressured, now testing key 99.00 level: Analysis for EUR/USD, GBP/USD, USD/CAD, USD/JPY

US Dollar Index (DXY)

The DXY slipped to 99.37 on Friday, shedding 0.5% intraday and marking a 1.5% weekly decline—its steepest since mid-April. This drop follows President Trump’s tariff threats against the EU and U.S. tech imports, which injected volatility into dollar demand. Despite temporary euro weakness on Friday, broader de-dollarization flows continued to weigh. The 50-period moving average near 100.30 now acts as strong resistance, while immediate support at 98.90 is being tested. Momentum favors sellers unless the DXY reclaims the 100.00 handle.

Euro (EUR/USD)

EUR/USD reversed gains after Trump proposed a 50% tariff on EU imports, briefly spiking to 1.1374 before retreating. It still posted a weekly gain of 1.4%, supported by fading dollar strength and large euro option expiries capping volatility. The pair remains above the 50-SMA at 1.1245, suggesting bullish bias persists. Traders are watching whether the pair can break the 1.1370 resistance zone. Barring new tariff escalation, EUR/USD may consolidate above 1.13 in the near term.

British Pound (GBP/USD)

Sterling rallied 1.6% this week, hitting 1.3487 as April retail sales surged 5% y/y, surpassing all forecasts. This rebound points to robust consumer resilience despite macroeconomic headwinds. GBP/USD now trades above its 50-SMA at 1.3357, confirming a short-term uptrend. With resistance near 1.3560 from February 2022 highs, sustained momentum could test this level. Unless U.S. policy surprises emerge, GBP strength is likely to persist into next week.

Japanese Yen (USD/JPY)

USD/JPY slid to 142.65 on Friday, losing 1.9% for the week, as Japan’s core CPI rose 3.5% y/y in April—its highest in two years—prompting rate hike speculation. This inflation print, alongside geopolitical stress and a weaker DXY, bolstered the yen.

Technically, USD/JPY is under pressure, trading below its 50-SMA at 145.00. Support near 142.00 is key; a break lower could accelerate downside. Market focus is now on BoJ rate signals and U.S. fiscal stability.

Canadian Dollar (USD/CAD)

USD/CAD dropped to 1.375, its lowest since October 2024, as Canadian retail sales beat estimates and core CPI spiked to 3.1%. With markets now expecting the BoC to hold rates in June, the loonie has outperformed.

The pair is decisively below the 50-SMA at 1.3919, reinforcing bearish momentum. Immediate support lies at 1.3730, and further CAD strength could drive a test toward 1.37. Broader USD softness and strong domestic data back the bullish CAD case near-term.

More Information in our Economic Calendar.