The US dollar extended its decline in morning trading despite this week's hotter US CPI and PPI inflation reports, even as Treasury yields moved higher. The greenback's struggle to attract buyers in the face of firmer price data was the session's defining theme, according to ForexLive's Morning Kickstart technical analysis.

The review, presented in a morning video covering the three major currency pairs—EURUSD, USDJPY and GBPUSD—outlines the directional bias, the risk-defining levels and the targets that would hand either buyers or sellers greater control in each pair.

The disconnect between the inflation headlines and the dollar's direction is worth watching. Stronger inflation would normally offer a currency support through expectations for tighter monetary policy, but traders still need to see that fundamental story reflected in the price action. So far, the dollar has mostly moved the other way. The two reports describe that story from different vantage points—the CPI tracks consumer prices while the PPI captures them at the producer level—and both feed the interest-rate expectations that traders weigh against the dollar.

Dollar lower against six of seven major currencies

The dollar's steepest decline came against the New Zealand dollar, followed by the Australian dollar. USDJPY was the exception, holding a marginal gain on the day even after retreating from its highs earlier in the week. Measured from the dollar's perspective, the moves were as follows:

• Against the NZD: down approximately 0.82%
• Against the AUD: down approximately 0.56%
• Against the CHF: down approximately 0.50%
• Against the GBP: down approximately 0.49%
• Against the EUR: down approximately 0.34%
• Against the CAD: down approximately 0.23%
• Against the JPY: up approximately 0.02%

AUDUSD was trading near 0.6958, rebounding after a weaker Australian employment report and the previous day's fall. The recovery is a reminder that the initial reaction to an economic release is only part of the story: sellers need follow-through to keep control, and when selling stalls and the price starts recovering, traders need to reassess their risk.

Ueda keeps the weak yen and inflation in focus

Bank of Japan Governor Kazuo Ueda said policymakers are watching the weak yen from an inflation standpoint. His remarks indicated that the timing and pace of future rate increases will depend on developments including foreign exchange, AI-related demand and the Middle East.

Ueda described economic and price developments as broadly consistent with the BOJ's forecasts and reiterated that financial conditions remain accommodative. A weaker yen can raise import costs and add to domestic price pressures, which keeps the currency relevant to the central bank's policy decisions—and keeps traders sensitive to comments about further tightening. The pair also sits at the intersection of two policy outlooks: US data and yields shape the dollar leg, while BOJ signaling shapes the yen leg, so remarks from Tokyo officials and US data releases act on the same exchange rate.

USDJPY falls below converged hourly moving averages

USDJPY moved higher earlier in the week but fell just short of its September 24 high. Having failed to clear that prior peak, buyers watched the subsequent retreat take the price back below the nearly converged 100- and 200-hour moving averages near 158.23. With the pair trading around 158.01, that moving-average area now defines the close risk for sellers.

As long as the price stays below 158.23, the setup remains more bearish and keeps sellers in control against that area. A move back above—and a sustained hold above—would rob the downside break of some of its significance. On the downside, today's low near 157.80 is the first reference point; a break below would extend the session's range and give sellers additional confirmation.

When the 100- and 200-hour moving averages converge, they create a relatively clear decision area. Traders can lean against that zone with defined and limited risk: the next move is uncertain, but the level that would weaken the trading idea is identifiable. The full walkthrough is in the video.

Currency ranges: USDJPY has the most room to extend

Session ranges compared with the 22-day average ranges show differing conditions across the three major pairs:

• EURUSD: 1.1209 to 1.1269 — approximately 60 pips, or 92% of its 65-pip average range.
• USDJPY: 157.80 to 158.18 — approximately 38 pips, or 38% of its 101-pip average range.
• GBPUSD: 1.1268 to 1.1349 — approximately 81 pips, or 111% of its 73-pip average range.

USDJPY has covered the smallest share of its average range, leaving the most room to extend relative to recent trading conditions. EURUSD has completed most of a typical day's range, while GBPUSD has already exceeded its average. That does not mean either pair has to stop moving; the average is a guide to the day's activity, not a ceiling.

US stock futures are mixed

US futures showed modest weakness in the Dow, a small gain in the S&P 500 and a larger decline in the Nasdaq:

• Dow futures: down 10.69 points
• S&P 500 futures: up 8.4 points
• Nasdaq futures: down 96 points

The mixed performance leaves technology shares lagging heading into the North American session.

Treasury yields move higher

US Treasury yields were higher, with the longer maturities showing the larger increases:

• 2-year: 4.7571%, up .61 basis points
• 5-year: 4.9166%, up 1.96 basis points
• 10-year: 5.1103%, up 2.33 basis points
• 30-year: 5.4518%, up 2.38 basis points

The 10-year yield is back above 5.10%, but the rise in yields has yet to translate into broad dollar strength this morning. Notably, despite the stronger PPI report the previous day, yields had moved lower. The 10-year also serves as a reference rate for longer-term borrowing costs across the economy, from mortgages to corporate debt, which is why its level is watched well beyond the currency market.

European equities mostly higher

• Germany's DAX: 25,585.68, up 0.80%
• France's CAC 40: 7,951.61, up 0.21%
• UK FTSE 100: 10,830.91, down 0.09%
• Spain's IBEX 35: 19,318.91, up 0.74%
• Italy's FTSE MIB: 49,732.12, up 0.34%

Gold, silver and Bitcoin edge higher

Gold was trading near $4,177.92, up approximately 0.17%. Silver was near $57.80, up approximately 0.74%. Bitcoin was changing hands near $82,656, up approximately 0.64%.

What is ahead in North American trading

The US calendar brings another inflation reading followed by an update on industrial activity. At 8:30 AM ET, September import prices are due. At 9:15 AM ET, September industrial production and capacity utilization will be released, with industrial production expected to rise 0.4% following an unchanged reading in August. Import prices measure the cost of goods purchased from abroad, while industrial production tracks output from factories, mines and utilities, and capacity utilization shows how much of that capacity is in use.

Import prices add another piece to the inflation picture after this week's CPI and PPI reports, while the industrial production data will help show whether activity is holding up alongside those price pressures. For the dollar, the reaction matters: stronger data needs to attract sustained buying to change the current direction.

EURUSD: buyers push toward the session high

EURUSD was trading near 1.1256, toward the upper end of its range, with the session high near 1.1269 the immediate upside reference. A break above that high would extend the recovery. If buyers cannot get through, the focus shifts to whether they can maintain control on a rotation lower; the analysis outlines the technical support levels that define that risk.

GBPUSD: an above-average move higher

GBPUSD was trading near 1.1338, close to its session high at 1.1349. The pair has already exceeded its average daily range, which gives context to the size of the move but does not by itself provide a sell signal. Sellers still need a technical reason to enter, and buyers need to hold support to maintain control.

The analysis defines those decision points for GBPUSD and EURUSD, along with the key 158.23 moving-average area in USDJPY.