Forex Signals Brief May 30: Focus on US PCE Inflation and Canada GDP Numbers

Quick overview

Today the US PCE inflation which is the FED’s favourite and Canadian March GDP report will close the week.

Today’s Market Updates

Economic data released this week paints a picture of persistent consumer strength balanced against steady inflation and evolving global dynamics. While personal income growth has moderated slightly, spending—particularly in services—continues to show resilience, supported by real wage gains and stable price levels. Meanwhile, Canada is showing signs of economic recovery, and gold, the U.S. dollar, and digital assets have each reacted uniquely to broader macro forces.

US PCE Inflation

In the latest reading, core PCE inflation rose by 0.1% month-over-month, up modestly from the flat reading in the previous month. Personal income expanded by 0.3%, a slowdown from 0.5% prior, while personal consumption increased by 0.2%, down from a previously robust 0.7%.

Despite the moderation, the spending outlook remains upbeat. Consumers continued to spend on services—including both essentials like healthcare and more discretionary categories such as travel and dining. This pattern suggests that demand for experiences and lifestyle services remains strong, even in the face of lingering inflation concerns and eroding consumer sentiment.

A key driver behind this steady consumption is real disposable income, which saw a 0.5% rise in March—the strongest monthly increase in over a year. This was underpinned by sustained wage growth and relatively tame inflation, which has helped cushion households against rising prices.

Inflation Outlook: Core and Headline PCE Unchanged

On an annual basis, both core and headline PCE inflation rates held steady at 2.3% and 2.6%, respectively. The lack of upward momentum in inflation readings may give policymakers more breathing room as they weigh potential interest rate adjustments in the months ahead.

Canada’s Economy: January Strength Lifts Q1 Growth

North of the border, Canadian monthly GDP is expected to rise 0.2%, reversing the prior decline of 0.2%. On a quarterly basis, growth is projected at an annualized rate of 1.8%, largely buoyed by strong performance in January.

Though residential investment may have been dragged down by weaker home sales, household consumption appears to have increased during Q1. Business investment also showed modest improvement, but analysts remain cautious due to ongoing global trade uncertainties, which continue to cloud the long-term outlook for capital spending.

Last week, markets were slower than what we’ve seen in recent months, with gold retreating as a result, the EUR/USD falling below 1.11, and stock markets continuing upward. The moves weren’t too big, but we opened 37 trading signals in total, finishing the week with 25 winning signals and 12 losing ones.

Gold Rebounds Off the 50 Daily SMA Again

After briefly pulling back, gold prices have resumed their climb, spurred by rising geopolitical tensions, a more dovish Federal Reserve stance, and a risk-averse market environment. Bullion came close to retesting the $3,500 level, a threshold not seen since April, before encountering resistance.

Gold’s appeal as a safe-haven asset remains intact, particularly as inflation risks persist and systemic uncertainties linger. Despite failing to decisively break above $3,500, sentiment around gold remains positive, and market participants are closely watching whether it can stage a stronger breakout in the coming days.

Currency Markets: USD/JPY Moves Defy Interest Rate Logic

In a move that diverges from typical patterns, the U.S. dollar gained ground against the Japanese yen, climbing from 143.40 to 144.31, even as U.S. interest rates declined. This unexpected behavior challenges the usual inverse relationship between yields and the dollar-yen pair.

Analysts attribute this to several factors, including ongoing capital outflows from Japan and strategic global asset reallocations, as investors respond to rising risks and shifting financial conditions. The move underscores the evolving complexity of FX markets, where traditional correlations are being tested by a rapidly changing global backdrop.

USD/JPY – Weekly Chart

Cryptocurrency Update

Digital Assets Surge: Bitcoin and Ethereum Remain Bullish

This week’s standout performers were cryptocurrencies, led by Bitcoin, which surged past $110,000 for the first time, advancing more than 6%. Its rally has been fueled by concerns over U.S. fiscal health, rising national debt, and global instability—reaffirming Bitcoin’s perceived role as a hedge against macroeconomic volatility.

BTC/USD – Weekly chart

Ethereum Tries Breaking Above MAs Again

Meanwhile, Ethereum delivered an even more impressive rebound, climbing over 20% from its April lows. The rally was boosted by the release of the “Pectra” upgrade, which enhances staking options and simplifies wallet integration—key steps toward improving institutional usability and retail adoption.

These upgrades, coupled with improving sentiment, have helped rejuvenate interest in digital assets across both individual and institutional investors, signaling growing confidence in the space despite market headwinds.

ETH/USD – Weekly Chart

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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