In the aftermath of the Fed's second rate hike and the biggest one in more than twenty years, its hawkishness seemed to become less pronounced and markets less concerned, causing US Yields and the US Dollar to deflate.
Chair Powell had ruled out more aggressive 75 basis point rate increases ahead, in favor of more half-percentage moves "would be on the table at the next two meetings".
Economic data that were released after that showed that, the US economy contracted by 1.5% in the first quarter (annualized), while the Fed's preferred gauge of inflation, the Core PCE eased again in April, to 4.9% year-over-year from 5.2% prior.
These figures could potentially support a more restrained stance, but the central bank remains committed to monetary tightening to fight inflation. Earlier this week, Governor Waller (voter) dismissed fears of a recession, saying that the GDP contraction in Q1 is due to factors that he does not expect to be repeated.
He also offered a glimpse of the Fed's thinking beyond July, saying the he supports more 50 basis points hikes for "several meetings" and interest rates "at a level above neutral" by the end of this year. 
Data from Japan late-last month, showed that Inflation jumped above the central bank's 2% target, since the CPI excluding fresh food surged to 2.1% in April (year-over-year), from 0.8% prior.
This figure could put some pressure on the Bank of Japan to rethink its loose monetary policies, but officials don't seem to be in any such mood, as we have seen some commentary in favor of the the stimulatory strategy.
As reported by Reuters, Governor Kuroda believes that the pace of gains in core CPI will slow in the next fiscal year and that it is important to continue with the current monetary easing. 
The pair registered a three-week decline and a losing May, after the March-April rally of nearly 1,500 pips, that culminated in twenty-year highs last month. However, given the renewed hawkishness by the Fed and the BoJ's commitment to the monetary stimulus, the pair returns emphatically to profits this week, with nearly 2% gains this week.
The recent correction was shallow and contained to 23.6% Fibonacci from the 2022 low/high and this can lead to new highs (131.35), although it may still be early for that and 133.89 seems distant.
On the other hand, the Relative Strength Index (RSI) is overbought and this can spark a pullback towards the EMA200 (127.50-128.09), but we don't see what could lead to a convincing break at this stage, which would bring 126.35 in the spotlight.
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 01 Jun 2022 https://www.federalreserve.gov/monetarypolicy/fomcpresconf20220504.htm
Retrieved 01 Jun 2022 https://www.federalreserve.gov/newsevents/speech/waller20220530a.htm