The past trading week witnessed a 0.1% depreciation in the US Dollar Index (DXY), marking subtle shifts in global currency valuations. Among major currencies, the euro demonstrated modest strength with a 0.1% appreciation, while emerging market currencies like the Thai Baht experienced more pronounced volatility, declining by 1%.

This currency movement occurred against a backdrop of mixed economic signals and shifting market expectations regarding central bank policies. The dollar's slight retreat follows its extended rally throughout Q3, prompting traders to reassess positioning.

The EUR/USD pair's 0.1% weekly gain interrupted an eleven-week consecutive decline, the longest losing streak since the euro's inception. This minor rebound raises questions about whether it represents genuine bullish sentiment or merely a technical correction in an established downtrend.

Several technical factors warrant consideration. The pair currently tests the psychologically significant 1.05 level, with a decisive break below potentially opening the door to further declines toward 1.03. Conversely, the Relative Strength Index (RSI) shows signs of emerging from oversold territory, suggesting potential for near-term consolidation or limited upside.

Key resistance levels to monitor include the 21-day moving average near 1.06 and the more substantial barrier at 1.068. Market participants should watch for confirmation of either a continuation pattern or reversal signals in coming sessions.

Recent economic data highlights growing divergence between the Eurozone and US economies. Eurozone retail sales disappointed significantly in August, declining 1.2% month-over-month against expectations of 0.3% contraction. Year-over-year figures showed a 2.1% drop, nearly double analyst forecasts.

These figures suggest potential headwinds for Q3 GDP growth in the currency bloc. Should September data confirm the weak trend, quarterly retail sales could contract by 0.8%, potentially weighing on broader economic activity.

Conversely, US economic indicators continue to demonstrate resilience. September's nonfarm payrolls exceeded expectations substantially, while robust retail sales figures underscore sustained consumer demand. This economic divergence maintains pressure on the ECB-Fed policy spread, a key driver of EUR/USD valuation.

Geopolitical developments in the Middle East have introduced additional volatility, with traditional safe-haven flows benefiting the dollar at the euro's expense during periods of heightened uncertainty.

The USD/JPY pair's approach toward the psychologically significant 150 level has intensified speculation about potential Bank of Japan (BOJ) intervention. While Japanese officials have downplayed the importance of specific numerical thresholds, market participants remain alert to possible policy responses.

Analysts note that sustained yen weakness could accelerate policy normalization timelines. Some institutions suggest the BOJ might consider adjusting its yield curve control framework or even raising short-term rates should USD/JPY breach 150 decisively.

Technical analysis shows USD/JPY maintaining its upward trajectory, though weekly RSI readings approach overbought territory, suggesting potential for near-term consolidation. Key support resides near 147.5, with resistance around the 150 handle.