Last week Jerome Powell signaled a 50 bps rate hike at May’s FOMC meeting as well as at least another 50 bps rate hike to come this year. The Fed has clearly signaled that it wants to tackle high inflation as a top priority and so a series of interest rates hikes are on the way from the Federal Reserve. Now, much of this has already been anticipated by investors, but as we approach the FOMC meeting we may see a final bout of USD buying in anticipant of a 50 bps rate hike.

What is interesting to note is that Seasonax shows that the last few days of April and the start of May tend to see USD strength. Look at this data from the USD index. Between April 29 and May 17, the U.S. Dollar index has risen a total of 11 times over the last 15 years. The average rise in price has been 21.85% during this time. The largest fall was -2.48% in 2009. The largest gain was +5.12% in 2010.

So, will the USD see one last push higher as we approach May’s FOMC meeting on May 04? Or is the USD already at ‘peak bullishness’ and the USD will start falling from here?

Major Trade Risks: If peak bullishness is already hit then the USD may see some selling before the FOMC meeting.