Positive initial vaccine trials from the company Moderna boosted risk sentiment this week as the market became optimistic that COVID-19 could be restrained more quickly than anticipated. This resulted in strength across the commodity currency block in AUD, NZD, CAD, and weakness in the USD midweek. The key aspect to remember about our present financial crisis is that it is primarily a medical crisis rather than a financial one. This means that a medical solution can be the answer that the market needs to put in a swift recovery. Expect Moderna's vaccine to be closely followed for further data releases going forward.


Key events from the past week

  • EURO: Franco-German proposal, Europe, Tues, May 19. The euro extended gains midweek boosted by a Franco-German proposal for a common fund that in-crease hopes of a European fiscal union. USD weakness on risk positive flows further boosted EURUSD demand midweek.

  • US-China: Trade war tensions return, All week. Tensions have returned between the US and China after the US Senate passed a bill potentially causing some Chinese companies to de-list from the US Stock exchanges. This caused some risk-off flows going into Thursday which supports the DXY above 99.00

  • Moderna Vaccine: Will it work? Note that vaccine hopes were questioned on Tuesday. STAT news reported that Moderna's COVID-19 vaccine did not produce critical data to properly assess the vaccine. However, this news was shaken off by Wednesday as the market focused on the optimism of a promising vaccine.


Key events for the coming week

  • US-China: Further trade disputes, May 25. In a light data slate next week there is unlikely to be many market-moving economic releases. However, of much greater concern will be if the negative US-China trade rhetoric turns into more action. If this happens then risk sentiment could easily become negative again.

  • XAU/USD: Short term demand for gold to fall? With vaccine hopes gold's surge higher was halted at $1750. If the positive sentiment continues next week will gold head back down towards support at $1725 or be able to keep grinding higher to $1800?

  • Coronavirus: Watch out for the latest virus news. Positive vaccine news from Moderna will continue to support risk, but keep aware that any negative news concerning the vaccine will result in risk-off markets returning.



Learn more about HYCM


High Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances as well as your personal resources. We do not recommend clients posting their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information please refer to HYCM’s Risk Disclosure.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex Analysis

Editors’ Picks

EUR/USD moves closer to 1.1100 amid upbeat market mood

EUR/USD is trading well above 1.1050, hitting new 8-week highs. US data was mixed with a ray of light coming from continuing claims. Hopes about the EU Fund and reopenings trump Sino-American relations.


AUD/USD retreats ahead of the close as US equities turn red

After spending most of the day within positive levels, US indexes turned south ahead of the close, dragging the Aussie alongside. AUD/USD still up for the day in the 0.6630 price zone.


Goldman Sachs puts Bitcoin on par with Gold

One of the world's largest investment banks, Goldman Sachs, announced a conference for its clients entitled “Implications of Current Inflation, Gold and Bitcoin Policies”

Read more

Gold: Limited gains below the $1730/oz level for XAU/USD

After bouncing from the 1690/1700 price zone XAU/USD is stalling below the 1730 resistance and the 50 SMA on the four chart. The picture is mixed as it seems the metal is challenging a tough resistance near the 1730 level.

Gold News

WTI trading off monthly highs near $33.00 per barrel

The oil recovery started in April’s lows consolidates after hitting fresh May’s highs. WTI is trading above the 100 and 200 SMAs on the four-hour but just below the 50 SMA, suggesting a mixed picture.

Oil News

Forex Majors