U.S. Dollar Under Pressure After Moody’s Downgrade and Trade Tensions: Analysis for EUR/USD, GBP/USD, USD/CAD, USD/JPY

DXY – Dollar Index Battles Key Support After Credit Downgrade

The U.S. Dollar Index bounced slightly to 100.41 after testing support at 100.22, with the 50-SMA overhead at 100.77. RSI at 42.47 remains below the neutral 50 mark, indicating bearish pressure. The greenback’s sell-off followed Moody’s downgrade and skepticism over U.S. trade and debt policies. A break below 100 risks deeper losses toward 99.80, as investor confidence in U.S. fiscal management continues to erode.

EUR/USD – Euro Gains vs Dollar Amid Credit Downgrade Pressure

EUR/USD surged above the 50-SMA near 1.1210 before retreating slightly to 1.1238. The RSI at 56.44 reflects bullish momentum, supported by the dollar’s broad weakness following Moody’s credit rating downgrade. Market skepticism over U.S. trade policy added to bearish sentiment on the greenback. However, resistance around 1.1250 capped further upside. The euro’s strength highlights investor rotation away from the dollar as safe-haven appeal is questioned.

GBP/USD – Sterling Tests Resistance as Dollar Weakens

GBP/USD climbed to 1.3354 after breaking above the 50-SMA (1.3282), with RSI at 59.66, showing moderate bullish pressure. Sterling benefited from the dollar’s retreat following Moody’s downgrade and trade policy uncertainty. The U.K.’s new EU trade framework also supported the pound. While buyers pushed toward April highs, consolidation is likely unless U.S. policy clarity improves. The greenback’s recent decline has opened short-term upside for cable.

USD/CAD – Dollar Struggles Below Resistance Despite Oil Tailwinds

USD/CAD hovered near 1.3948, testing support around 1.3938 with the 50-SMA offering nearby support. RSI at 48.33 shows weakening bullish momentum. Despite oil strength potentially weighing on USD/CAD, the dollar’s struggle continues as markets absorb the credit downgrade and looming debt concerns. Sellers are active below the 1.3950–1.3980 resistance zone, keeping the pair capped. A break below the 50-SMA could signal deeper retracement.

USD/JPY – Dollar Weakens Toward 144.50 as Safe-Havens Gain

USD/JPY dropped to 144.98, just under the 50-SMA at 145.91. RSI near 41 signals bearish sentiment, with safe-haven flows into the yen accelerating after the U.S. rating downgrade. The dollar’s appeal eroded as Japan and other major economies appeared more insulated from U.S. fiscal risks. Unless buyers defend the 144.50 zone, the pair may slide further toward early May lows, tracking dollar softness.

More Information in our Economic Calendar.