USD Seasonality Suggests May Rebound After Weak April Performance

Forex seasonality analysis for May 2026 highlights the potential for a US dollar recovery following a rough April, during which the greenback declined against most major counterparts. Historical patterns show the dollar has posted gains in May in roughly 60% of the past two decades, particularly against the euro and British pound. EUR/USD, which rallied through April, may face headwinds if seasonal tendencies hold, with resistance near recent highs likely to be tested. GBP/USD similarly could see a pullback after its April advance, while USD/JPY may find support as yield differentials remain favorable for dollar longs. AUD/USD faces seasonal downside pressure, compounded by global risk-off sentiment tied to Middle East tensions. Key macro catalysts this month include the US Non-Farm Payrolls report, CPI data, and multiple Federal Reserve speaker appearances that could reinforce or undermine the seasonal thesis. Traders should use seasonality as a supplementary tool alongside fundamental and technical analysis, as geopolitical risks could easily override historical patterns in the current environment.