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.

Canada’s GDP increased from 0.3% to 0.6% in the fourth quarter. This growth indicates a strengthening of economic activity compared to the previous quarter.

In financial markets, the euro is stabilising around 1.0400 after US PCE inflation data. Gold prices have fallen to below $2,840, amidst concerns over trade policies and market flows.

The GBP/USD pair is maintaining its position just above 1.2600 post-PCE data release. Upcoming economic events include US payrolls and an ECB rate meeting, with potential implications for market dynamics.

Canada’s latest GDP report provides a clearer picture of economic momentum, with quarterly growth doubling to 0.6%. This stronger performance suggests businesses and consumers are spending more, helping to counteract some concerns that had previously emerged. Greater economic expansion often influences expectations around interest rates, which in turn impacts trading strategies.

Meanwhile, the euro is holding firm near 1.0400 following the release of US PCE inflation data. This suggests that investors are absorbing the information without making abrupt shifts. Stability here implies there are no immediate shocks, but with key economic indicators due in the coming days, that could change. Traders should be prepared for movement if incoming data alters inflation expectations or central bank policy outlooks.

Gold has slipped below $2,840, reflecting ongoing concerns about trade measures and market liquidity. Shifts in trade strategies and capital flow patterns appear to be influencing sentiment. When gold retreats, it sometimes signals confidence in broader financial assets, but it can also mean investors are recalibrating their hedging positions based on new risks.

Sterling is keeping its footing just over 1.2600 after the PCE release, showing resilience. Whether it can hold that level depends on forthcoming job data from the US and the European Central Bank’s interest rate decision. These events will shape expectations around monetary policy moves, which have direct consequences for those trading in volatility-sensitive assets.

Over the next few weeks, attention will turn to employment figures and central bank decisions. Market positioning may shift quickly if wage growth surprises or policy signals deviate from expectations. When data influences interest rate outlooks, derivative traders adjust accordingly, often at speed. Those watching yields and forex movements should take a close look at whether market expectations are aligned with policymakers’ messaging.

Core PCE data is set to be released today at 8:30 AM US Eastern Time. The expected month-on-month increase ranges from 0.1% to 0.2%, while the year-on-year figure is anticipated to be between 2.7% and 2.9%.

The consensus mid-point for these figures will provide a benchmark for economic assessments. Market reactions may be influenced by how the actual data aligns with these projections.

If the figures meet expectations, financial markets may react with stability, as the data would indicate that inflationary pressures remain within a predictable range. A reading on the lower end of projections could strengthen the argument for monetary policymakers to consider adjustments in favour of looser financial conditions. Conversely, if the figures come in higher, it could reinforce concerns that inflation remains persistent, which might lead to shifts in interest rate expectations.

Given that Jerome and his colleagues have emphasised the importance of incoming data in shaping future decisions, today’s release carries weight. A number at the high end of forecasts or exceeding them altogether might lead traders to reassess the possibility of policy staying restrictive for a longer period. If that happens, short-term interest rate markets could see heightened adjustments, with pricing expectations moving accordingly.

Yesterday, John highlighted that labour market resilience remains a factor in their broader assessment of inflation dynamics. If today’s data indicates inflation is still running warmer than many anticipate, it could align with concerns that wage growth may still be feeding into price pressures. That would make upcoming employment figures even more relevant for shaping near-term expectations.

At the same time, Sarah pointed out that consumer spending trends will play a role in assessing the sustainability of disinflation. Should the core reading register at the lower end of the forecast range, alongside signs of softer demand, it would reinforce the notion that price pressures are easing. Such an outcome might affect positioning in rate-sensitive assets accordingly.

Given these potential outcomes, attention will not only be on the raw percentage changes but also on whether prior months’ numbers are revised. If last month’s figure is adjusted higher, that could alter broader interpretations even if today’s report falls in line with forecasts.

With markets already pricing in expectations around policy shifts, any deviation from estimates may have an immediate effect on short-term rate markets, treasury yields, and broader asset pricing. Those who focus on volatility may see opportunities depending on the extent of any surprise in the release.

As we assess the period ahead, what stands out is that each new data point contributes to the broader picture of inflation momentum. Whether today’s reading strengthens or weakens the prevailing sentiment will depend not just on its absolute value but on how it compares to expectations and the response from policymakers in future remarks.

The EUR/JPY pair reached near 157.00 as the Japanese Yen weakened following the release of Tokyo’s soft CPI data. February’s Tokyo headline CPI dropped to 2.9% from 3.4% in January, with core CPI rising by 2.2%, below expectations.

Despite potential tariff issues posed by US trade policies, the Euro has maintained strength against its peers. In Germany, HICP rose by 2.8%, exceeding the anticipated 2.7%, suggesting further ECB easing may still occur.

The EUR/JPY pair has recovered from a seven-month low, but the outlook remains bearish, with bearish momentum conditions noted. A movement above 157.30 could lead to further gains towards 158.00, while dropping below 154.80 may expose lower support levels.

The Japanese Yen is influenced by the Bank of Japan’s monetary policy and international bond yield differentials. Historically, the BoJ’s loose policies have led to Yen depreciation, but recent policy shifts have bolstered its value amid changing global interest rates. The Yen is also perceived as a safe haven during market uncertainties.

With the Japanese Yen weakening on the back of softer-than-expected Tokyo CPI data, we have seen the EUR/JPY pair push towards the 157.00 mark. February’s headline figure came in lower at 2.9%, down from January’s 3.4%, and while core inflation rose by 2.2%, it still missed estimates. With signs of slowing inflation in Japan’s capital, traders are likely considering the extent to which the Bank of Japan will maintain its cautious approach to policy adjustments.

Despite uncertainties around trade policies, the Euro remains relatively firm. In Germany, the latest HICP measure advanced to 2.8%, edging past the forecast of 2.7%. This keeps the discussion open on the European Central Bank’s next steps. Even though price growth has slowed, inflation remains above target, so policymakers may continue evaluating rate adjustments rather than rushing into cuts.

Right now, the EUR/JPY pair is recovering from its seven-month low, but overall conditions still lean towards a bearish view. If buyers manage to clear 157.30 with conviction, the door opens for a move towards 158.00. On the other hand, losing ground at 154.80 could bring deeper selling pressure, potentially exposing further downside levels.

The fate of the Yen isn’t just tied to the domestic inflation story. Japan’s currency has long been sensitive to the gap between global bond yields and the BoJ’s stance. Historically, ultra-loose policy from Tokyo has led to depreciation, as low yields drive investors towards higher-return assets elsewhere. However, recent tweaks in monetary settings have provided some support, particularly as global interest rates shift. The Yen also tends to attract demand when external risks rise, as it is often seen as a defensive asset in times of uncertainty.

Traders should remain attentive to interest rate expectations on both sides, as well as upcoming economic releases that could shake up sentiment. Keeping an eye on liquidity and price momentum will be important when determining whether near-term moves have strength or are likely to fade.

Germany’s February preliminary Consumer Price Index (CPI) showed an increase of 2.3% year-on-year, matching expectations. Month-on-month, CPI rose by 0.4%, consistent with forecasts, recovering from a prior decline of 0.2%.

The Harmonised Index of Consumer Prices (HICP) reported a year-on-year increase of 2.8%, above the anticipated 2.7%. Month-on-month, HICP grew by 0.6%, surpassing the expected 0.5% after a previous drop.

Core annual inflation for February is estimated at 2.6%, showing a decrease from January’s 2.9% and down from 3.3% at the end of the previous year.

These inflation figures offer a reliable gauge of price pressures within Europe’s largest economy and set the stage for expectations regarding broader eurozone data. The fact that headline inflation met projections while HICP came in slightly above forecast suggests that underlying pricing dynamics remain firm, despite the ongoing disinflationary trend in core measures. With core inflation continuing its steady descent from late last year, markets may interpret this as an indication that underlying cost pressures are gradually easing.

Month-on-month movements help provide context to these broader trends. A return to positive territory in CPI after January’s decline aligns with normal seasonal patterns, but February’s increase carries additional weight considering the broader economic environment. The acceleration in HICP, exceeding forecasts, hints at resilience in certain areas of the economy despite tightening financial conditions. Energy, services, and food prices likely played varying roles, with their relative influence shaping future inflation expectations.

For those monitoring monetary policy signals, this data reinforces a measured approach. The European Central Bank (ECB) will factor in these figures alongside the upcoming eurozone-wide inflation release to assess whether the downtrend in core inflation is persistent enough to justify a shift in stance. Given that core annual inflation has now receded for a second consecutive month, policymakers may find confidence in the notion that underlying pressures are softening, albeit at a measured pace.

Market response to these numbers should be viewed in the context of broader rate expectations. If upcoming data confirms similar patterns across other eurozone economies, it could further solidify sentiment around possible rate adjustments later in the year. However, if upward pressure on headline or harmonised figures persists, sentiment could shift, influencing rate expectations.

Individuals engaged in derivatives will want to assess the extent to which this inflation path aligns with market pricing for central bank decisions. With momentum in core readings showing a downward trend but broader measures maintaining some firmness, short-term reassessments may be in order. The next wave of inflation reports will be pivotal in determining whether this path remains intact.

Pound Sterling (GBP) leads the G10 currencies this week but remains down 0.3% versus the US dollar. PM Starmer’s recent visit to Washington fostered agreements on security and trade, moving away from tariffs toward dialogue.

The GBP/USD spot price fluctuates around the 100-day moving average at 1.2628. Intraday losses may be stabilising near short-term support levels at 1.2555/65, with resistance expected at 1.2610/20 and further at 1.2690/00.

Trade and monetary policy risks could increase pressure on the EUR/GBP, positioning the major support level at 0.82 for potential challenge in the coming weeks.

Sterling’s current outperformance among the G10 currencies suggests investor confidence, yet a decline of 0.3% against the dollar highlights persistent headwinds. Keir’s diplomatic outreach in Washington indicates a shift in strategy, favouring cooperation over trade barriers. This approach could foster a more stable international framework, though market participants will watch for concrete policy progress before adjusting their positions.

The pound’s movements against the dollar reflect a balance between technical markers and broader sentiment. With price action hovering around the 100-day moving average of 1.2628, traders may see the 1.2555/1.2565 range as an area where losses could steady. However, failure to hold above this level might prompt further declines. Conversely, resistance remains at 1.2610/20, with the next test near 1.2690/1.2700. A move beyond these levels would require stronger catalysts, potentially in the form of economic surprises or policy shifts from rate-setters.

Against the euro, the balance of risks could weigh on the single currency. The 0.82 support level is likely to become more relevant, particularly as monetary policy expectations influence price movements. With shifts in economic projections and inflation outlooks, market participants should consider how euro-area dynamics may introduce further volatility.

In the near term, traders should focus on price action around these key levels while monitoring scheduled economic releases and policy developments. The coming weeks could bring moments of heightened market reaction, making risk management a priority.

The dollar remained steady as the week approached its end, with USD/JPY showing an increase above 150.00. Meanwhile, EUR/USD and GBP/USD remained largely unchanged around 1.0400 and 1.2600, respectively.

Data releases included Germany’s January retail sales rising by 0.2% and a 1.1% increase in the import price index. February’s consumer price indices for France and Bavaria indicated moderate changes, while Italy’s remained stable at 1.7%.

European equities experienced a decline, although US futures were up 0.2%. Gold fell by 0.4% to $2,864.20, and Bitcoin dropped 4.8% to $80,258, nearing an important technical level. Upcoming US PCE price data and month-end flows are anticipated to influence market volatility.

The stability of the dollar suggests that markets are pausing ahead of new economic data and potential shifts in monetary policy expectations. The climb in USD/JPY beyond 150.00 points to persistent demand for the greenback, possibly from carry trade positioning or uncertainty around the Bank of Japan’s policy stance. In contrast, EUR/USD and GBP/USD holding steady implies a balance in market sentiment, with no immediate catalyst driving movement in either direction.

Economic data from Germany gives a mixed view of consumer activity and pricing pressures. A 0.2% rise in retail sales, though positive, suggests tepid consumer spending at the beginning of the year. Meanwhile, the 1.1% gain in the import price index hints at lingering cost pressures, which could feed into inflation if sustained. France and Bavaria’s consumer price indices reflecting only mild changes indicate a slow-moving trend in inflation for now, while Italy’s steady 1.7% points to stability in price growth.

European stock markets moving lower contrasts with the slight gains seen in US futures. This divide may reflect confidence in the American economy relative to concerns about growth prospects in the eurozone. The dip in gold, down 0.4% to $2,864.20, suggests reduced safe-haven demand, though the drop in Bitcoin is more pronounced, losing 4.8% and pressing against a key technical threshold. Price action in the cryptocurrency space will need watching, as further losses could trigger risk-sensitive moves elsewhere.

Attention now turns to upcoming US PCE price data, a key measure of inflation that could shape expectations around future Federal Reserve decisions. With month-end flows also in play, market movements may not follow typical patterns in the short term. Trading strategies will likely need to account for heightened volatility and positioning shifts as funds rebalance their portfolios.

Inflation data from France reported no change in February, contrasting with expectations of a 0.2% increase. This has raised concerns about trade and tariffs affecting the outlook for the euro.

Current market parameters are set by the 100-day moving average at 1.0517 and the 40-day at 1.0392. Trend momentum signals indicate a lack of strength, suggesting that range trading will likely continue.

Short-term price action appears more bearish, following repeated failures of the euro in the low 1.05 zone. A downward push towards 1.02 is possible in the near term.

When we see inflation figures holding steady where a rise was expected, it sends a message that economic pressures may not be playing out as predicted. For traders watching currency movements, this means that earlier assumptions about interest rate paths may have to be reconsidered. The euro’s sluggishness isn’t happening in isolation—concerns over trade policies, particularly tariffs, are contributing to the uncertainty.

Looking at the technical stance, we see that the euro remains contained within a structured range, shaped by the 100-day and 40-day moving averages. With the longer-term average positioned above, there’s an upper limit being respected, while the shorter-term provides a softer level of support. Momentum indicators confirm that there’s no convincing push in either direction, which often suggests that attempts to break out of the range are likely to struggle.

Short-term price action isn’t painting an optimistic picture. Each time the euro has attempted to hold above 1.05, it’s faltered. The repeated failures have worn away confidence, while bearish sentiment is becoming more apparent. Without a shift in positioning or fresh upside drivers, pressure remains tilted downwards. The path towards 1.02 is open, and if support levels fail to hold in the coming sessions, traders will need to assess the potential for a deeper slide.

US stock futures have seen modest gains with S&P 500 futures rising by 0.4%, Nasdaq futures also increasing by 0.4%, and Dow futures up by 0.3%. Recent trading was influenced by concerns over tariffs from Trump, leading to a near-continuous decline in US stocks throughout the week, despite some initial stronger performances.

Nvidia and other key tech stocks faced notable declines, falling over 8% recently. Even with a slight pre-market recovery, confidence remains low due to past patterns of volatility, ongoing AI market challenges, and potential market pressures ahead, including upcoming US PCE price data and further Trump-related news.

Technical indicators show that the S&P 500 has fallen below its 100-day moving average, while the Nasdaq is approaching its 200-day moving average. The current gains do not reflect the underlying instability in market sentiment, suggesting continued risks as the weekend approaches.

Market moves this week have been closely tied to shifting policy expectations and uncertainty linked to Trump’s trade stance. After the sharp fall across major US indices, today’s slight bounce in futures might provide some relief. However, the broader trend does not indicate a true shift in sentiment.

Michael’s policies have investors weighing the potential for heightened trade barriers, especially after recent remarks on tariffs. The past few sessions saw pronounced reactions in equities, with some of the largest companies facing fast declines. Nvidia’s sharp drop was a clear reflection of this, given its importance in both the AI sector and broader tech space. While today’s modest recovery in pre-market suggests some bargain hunting, previous trends show that these kinds of rebounds do not always hold.

Beyond individual stocks, the technical setup for broader indices raises further questions. With the S&P 500 already dipping under its 100-day moving average, the ongoing weakness leaves little room for confidence. Meanwhile, the Nasdaq being near its 200-day level suggests pressure could persist. If sellers take control again, a break of these levels might drive sharper moves down.

Some traders may find short-term opportunities, but there is little evidence to suggest that volatility is about to ease. The upcoming US PCE price data remains a key event, particularly with inflation continuing to shape expectations for interest rates. Depending on how that report comes in, it could either stabilise sentiment or add to the uncertainty.

Weekend positioning may also play into today’s trading, given the potential for fresh developments regarding US policies. Sentiment-driven moves have been the defining theme of this week, and that is unlikely to change as we head into the next round of economic and political updates. Investors reacting too early to short-term gains run the risk of misinterpreting what remains a fragile situation.

Border tariffs are set to return next Tuesday, although their duration remains uncertain. Increased punitive tariffs pose risks, but reactions in the foreign exchange market have been relatively muted compared to earlier in the year.

The Canadian economy may face considerable costs, while the US could see higher prices affecting sectors like the automotive industry. Recent movements show the USD advancing to the low 1.44 range, with some minor recovery for the CAD evident in early trading.

Current support for CAD stands at 1.4350/75, while resistance is noted at 1.4465/75. Overall, the USD maintains bullish momentum that may restrict significant CAD gains for the time being.

With border tariffs making their return next Tuesday, the focus shifts to how businesses will adapt. Costs are expected to weigh on the Canadian side, while American buyers could see inflated prices, particularly in the automotive sector. Although these measures bring uncertainty, the market reaction has been relatively restrained, especially when compared to the volatility seen earlier this year.

The US dollar has moved up into the low 1.44 range, reflecting the ongoing pressure on the Canadian dollar. In early trading, there has been a slight recovery for Canada’s currency, though whether this can be sustained is another matter. Support levels remain around 1.4350 to 1.4375, while resistance sits near 1.4465 to 1.4475.

For those of us watching these moves closely, the momentum still tilts in favour of further gains for the dollar, which could make it tough for the Canadian dollar to hold any rallies for now. Those trading in derivatives should be mindful of how these technical levels and tariff decisions interact, as this will shape expectations in the coming weeks. A sharp break above resistance would suggest markets have adjusted to tariff risks without much hesitation, while a test of lower support levels could indicate traders are more concerned than they appear.

It is also worth considering how inflation pressures play into this. A rise in costs could push interest rate discussions in an unfavourable direction, affecting both currencies. If pricing pressures accelerate beyond current forecasts, it may force quicker adjustments than currently expected. At the same time, if tariffs cut into consumer demand, we might see a different reaction altogether.

The coming period will provide a clearer picture of how adaptable the market remains. These price points and broader sentiment shifts form the basis of what could be a critical phase, particularly for those navigating volatility in the derivatives space. The fundamental picture remains in flux, meaning awareness of emerging shifts will be key.