Weekly EURUSD, GBPUSD, USDJPY Forex Analysis May 23 – May 30, 2022
With near-term sentiment now in a “corrective” mood, it looks likely that this US dollar retracement can extend a bit further. Sideways consolidation also looks like a probable scenario. That being the case, the long-term dynamics haven’t been altered, and the predominant bullish trend should remain intact. Fed communication is still firmly hawkish, and quantitative tightening (QT) and 50bp rate hikes will happen in the coming months. In contrast, other central banks fall significantly behind the Fed in terms of tightening policy. This divergence between the central banks should continue to support the USD and eventually extend the existing uptrend.