The dollar recouped some light ground in the final trading day of May but ended the month lower, the first time this year.

That largely came on the back of retracement moves in the past two weeks, after having seen the greenback surge across the board since April. As we get things going on the new month, there are a lot of moving parts at play and one can say that the retracement moves may be settling down a little as market players reassess the narratives. A look at EUR/USD:

EURUSD D1 01-06

The bounce in the past two weeks saw the pair move up to test the 38.2 Fib retracement level at 1.0787 before stalling this week. That has since seen the near-term momentum wane with a drop below the 100-hour moving average, now at 1.0733, with only the 200-hour moving average helping to provide support to the drop yesterday.

EURUSD H1 01-06

It is a somewhat similar case for GBP/USD after trying to hold a break above 1.2600, only to fall back to 1.2580 at the moment. Sellers are also wrestling back some near-term momentum, with the 200-hour moving average seen at 1.2571 a key focus point in the session ahead.

The dollar is seen posting gains across the board for today with USD/JPY also up 40 pips to above 129.00 as bond yields track higher. Inflation is starting to come back into focus and that is seeing the bond selling return for a bit. The catalyst this week has been the inflation numbers from Europe, heaping added pressure on the ECB to act.

Elsewhere, USD/CAD is up 0.2% to 1.2670 as buyers look to try and offer some pushback ahead of the Bank of Canada meeting. The 200-day moving average at 1.2659 is a key point of contention ahead of the daily close today though.

Meanwhile, AUD/USD is down 0.2% to 0.7160 and NZD/USD down 0.5% to 0.6480 as traders will look to reassess the risk and dollar momentum after the happenings last week.