Forex Today: Markets cautiously optimistic in thin holiday trading, cryptos remain pressured

Yohay Elam FXStreet

Here is what you need to know on Monday, May 31:

Markets are calm amid bank holidays in the US and the UK and after a volatile Friday. Investors seem to shrug off mixed data and virus concerns. Cryptocurrencies are on the back foot after suffering pressure over the weekend. German CPI is eyed.

The US dollar is edging lower amid cautious optimism in markets and after the greenback rapidly lost ground late on Friday. The move, attributed to end-of-month flows, came after US Core PCE beat estimates with 3.1% YoY. Monday's release of mixed Chinese Purchasing Managers contrasted concerns of overheating in the US. Beijing reported that the Manufacturing PMI came out at 51 points in May, marginally below estimates.

Virus: The B.1.167.2 COVID-19 variant first found in India, continues raising concerns in Britain and also in Asia. Vietnam reported that a strain of that variant has been wreaking havoc in the country and India is ramping up its vaccine production.

GBP/USD is holding up around 1.42 despite worries that the spread of the variant may cause the government to delay the last stage of the reopening due on June 21.

EUR/USD is hovering around 1.22 ahead of the publication of Spanish and German preliminary Consumer Price Index (CPI) figures for May. Moderate increases are projected.

Bitcoin is struggling below $35,000 and Ethereum is changing hands under $2,400, extending losses sustained over the weekend. China reiterated its pledge to crack down on market manipulation, with efforts focused on commodities rather than digital assets at the moment

Later in the week, a full buildup toward Friday's US Nonfarm Payrolls is set to grab attention.

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Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

EUR/USD keeps the rangebound trade near 1.1850

EUR/USD is still under pressure, drifting back towards the 1.1850 area as Monday’s session draws to a close. The modest decline in spot comes as the US Dollar picks up a bit of support, while thin liquidity and muted volatility, thanks to the US market holiday, are exaggerating price swings and keeping trading conditions choppy.

GBP/USD trades with negative bias, eyes 1.3600 ahead of UK jobs data

The GBP/USD pair trades with a negative bias for the second straight day, though it lacks bearish conviction and holds above the 1.3600 mark through the Asian session on Tuesday. Traders now look forward to the release of the UK monthly jobs report, which will influence the British Pound and provide some impetus to the currency pair.

Gold sticks to a negative bias below $5,000; lacks bearish conviction

Gold remains depressed for the second consecutive day and trades below the $5,000 psychological mark during the Asian session on Tuesday, as a positive risk tone is seen undermining safe-haven assets. Meanwhile, bets for more interest rate cuts by the Fed keep a lid on the recent US Dollar bounce and act as a tailwind for the non-yielding bullion, warranting caution for bearish traders ahead of FOMC minutes on Wednesday.

AI Crypto Update: Bittensor eyes breakout as AI tokens falter

The artificial intelligence (AI) cryptocurrency segment is witnessing heightened volatility, with top tokens such as Near Protocol (NEAR) struggling to gain traction amid the persistent decline in January and February.

US CPI is cooling but what about inflation?

The January CPI data give the impression that the Federal Reserve is finally winning the war against inflation. Not only was the data cooler than expected, but it’s also beginning to edge close to the mystical 2 percent target. CBS News called it “the best inflation news we've had in months.”

XRP steadies in narrow range as fund inflows, futures interest rise

Ripple is trading in a narrow range between $1.45 (immediate support) and $1.50 (resistance) at the time of writing on Monday. The remittance token extended its recovery last week, peaking at $1.67 on Sunday from the weekly open at $1.43.