As the US trading session begins, traders are preparing for the US PCE data release, expected to show a 0.3% increase for both headline and core measures. The EURUSD has moved down, while the GBPUSD has increased; the USDJPY is on an upward trend.

In the equity markets, the Dow has risen by 214 points, the S&P by 15.18 points, while the Nasdaq remains close to unchanged, reflecting recent declines over the past five Fridays due to concerns regarding the upcoming weekend news.

The EURUSD is currently trading near the 1.0400 to 1.04065 range, which is a significant swing level and represents 38.2% of the recent upward movement from February’s low. A move above this level indicates bullish sentiment, while a drop suggests bearish outlook.

The USDJPY has managed to surpass the 200-hour moving average and is eyeing the 150.933 level, which aligns with a 38.2% retracement from February’s peak. A breakthrough at this level may facilitate further upward traction.

In the GBPUSD, the exchange rate is testing the former 38.2% retracement level from the September high, which sits at 1.26087. If the price goes beyond this point, a cluster of moving averages between 1.2631 and 1.26395 could support further gains.

As we approach the release of the US core PCE data, market expectations remain firmly set at a 0.3% month-on-month rise. With this in mind, trading sentiment could shift quickly, particularly in currency pairs where momentum already appears to be developing. The pound, for instance, has maintained an upward push, while the euro is struggling to hold onto key technical levels. Meanwhile, the yen continues to weaken, reinforcing the broad dollar strength seen in recent sessions.

Stock markets reflect a mixed picture. While the Dow has added 214 points and the S&P has edged higher, the Nasdaq remains near flat, weighed down by broader concerns. The repeated Friday declines in recent weeks highlight nervousness as traders position cautiously ahead of weekend events that could shift sentiment when markets reopen. Given this backdrop, positioning in risk assets remains sensitive to both economic data and external developments.

In currency markets, the battle around critical technical levels continues. The euro is holding just above 1.0400, but this area is pivotal. This range coincides with a longer-term Fibonacci retracement and has acted as a key decision point in the past. If sellers gain control and push the price lower, it would reinforce the broader negative trend seen throughout the past week. A recovery above 1.04065, however, could signal that buyers are willing to step in with more conviction.

The yen, on the other hand, has maintained its climb against the dollar, with prices now testing 150.933. This area carries weight, as it represents a key retracement level from February’s peak. A move through here would likely encourage further buying pressure, particularly if momentum traders jump on board, targeting the next round of resistance. Should sellers emerge, though, the next test would be whether buyers keep defending the 200-hour moving average that was reclaimed earlier. Markets are watching closely to see how this plays out.

Sterling is also facing a moment of decision. The exchange rate has lifted towards 1.26087, which previously acted as resistance and aligns with a key retracement level from last autumn’s highs. If buyers push beyond this, the focus shifts to an area packed with moving averages between 1.2631 and 1.26395. A successful move beyond this zone would confirm building momentum. However, if momentum stalls, short-term traders may look to fade the rally and force a rotation lower.

As the data release draws closer, traders should remain aware of how these price points interact with broader market sentiment. Economic releases often act as catalysts, determining whether key technical levels break decisively or hold firm. The shifting dynamic between risk appetite, dollar strength, and economic expectations will be central to near-term positioning.