Traders said the S&P 500 could rise as high as 2,080 after closing just below the psychologically key 2,050 level on Friday.
"I think the stock market now faces its real test," said Rod Smyth, chief investment strategist at RiverFront Investment. "My belief is the data will determine whether we break through this. … Our belief is the data will come through."
February existing home sales due Monday and new home sales expected Wednesday will be watched for indications on the health of the consumer.
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Besides housing data, economic releases on the calendar include the third estimate to fourth-quarter GDP, corporate profits, durable goods and Markit PMI. No major data is due out of China.
Still, the yuan and other currencies will remain in focus after the U.S. dollar index dropped following the Fed's Wednesday announcement. The recent weakness has helped commodities and emerging market assets.
The iShares MSCI Emerging Markets ETF (EEM) gained more than 2.5 percent in the past week for its first three-week win streak since October.
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U.S. crude oil futures for April settled at $39.44 a barrel on Friday after briefly topping $41 in intraday trade. The contract rolls on Monday after the settle to May, which also ended slightly lower at $41.14 a barrel on Friday.
"If oil stabilizes around current levels, it will stop being the most-focused on thing," Smyth said.
The U.S. dollar index recovered slightly on Friday but is down more than 3.5 percent since the beginning of January, on pace for its worst quarter since the first quarter of 2011.
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"The dollar and some of the other markets are still trying to interpret how the Fed is going to move and set expectations accordingly," Deming said.
On Wednesday, the Federal Reserve surprised markets by cutting its rate hike projections more than expected, down from four to two in 2016. The central bank also lowered near-term inflation PCE expectations and Fed Chair Janet Yellen remained cautious on the sustainability of recent upticks in inflation data.
"I think everyone should focus on anything that's inflation related," said Bryce Doty, senior fixed income manager with Sit Investment Associates. "There are inflection points every year, there are one to three, and this year inflation is one of them so people need to keep one ear open."
"I've been through markets when the Fed has to play catch up and it's not fun," he said. "They could be behind the curve if they don't talk about this trend in inflation."
Inflation data aren't due for at least another week, but early on Monday Eastern Time, Richmond Fed President Jeffrey Lacker is scheduled to speak in Paris on inflation expectations.
Atlanta Fed President Dennis Lockhart is due to speak later in the day on the economic outlook and monetary policy.
Other Fed talks scheduled for the week include St. Louis Fed President James Bullard on Thursday speaking about the U.S. economy and monetary policy.