In the financial markets, recent surprises have greatly rattled investor confidence and affected risk taking. The GBP/USD currency pair has had a huge run up. It is making a strong push higher toward the 1.2800 level as Tuesday’s trading sessions start in Europe. This overall positive trend line is indicative of a more general positive change in market sentiment. It has had a huge effect on other currency pairs and commodities.
Meanwhile, James Murphy, a noted cryptocurrency lawyer, has filed a lawsuit against the Department of Homeland Security (DHS) in a D.C. District Court. This lawsuit and the resulting debate continue to highlight a growing conflict over regulatory frameworks and their impact on the expanding cryptocurrency space. Even more broadly, the lawsuit could serve as a watershed case for a number of stakeholders with an interest in the industry.
Gold is preparing for bullish breakout in the commodities sector. It’s up over $2,920, after taking a big hit at the beginning of this week. This rally in prices is largely driven by a newfound Dollar weakness. What’s more, investors have turned a more favorable risk attitude. Facing different market conditions, over the last year, gold has repeatedly benefitted from this supporting dynamic.
On the forex side, EUR/USD is struggling to stay with its bullish impetus. Previously it had been climbing in the direction of the 1.1000 barrier. Now, it has collapsed back beneath 1.0950, reflecting the wild swings in trading sentiment and market faith.
The overall optimistic market sentiment is given further bolster by sharply recovering US Treasury bond yields. Nonetheless, these yields have placed key restrictions on XAU/USD’s upward trajectory. Today’s environment is one without daily or weekly headlines suggesting that trade tensions are beginning to thaw. This lack of clarity has resulted in conflicting feelings across different financial instruments.
We’ve noted that WSJ editorial board is calling for every other country to drop their tariffs to zero. They think that if implemented this change would provide a huge benefit to global trade. In particular, they pointed out that former President Trump’s “reciprocal” tariffs should be dealt with in the same manner. This recommendation is intended to create a more positive bilateral trade and investment climate and reduce counterproductive economic coercive measures that can disrupt global supply chains and markets.
The arguments against day trading, meme stock mania and the swings in volatility and liquidity of the market are abundant. Investors need to be careful. Based on statistics, 81.4% of retail investor accounts lose money when trading CFDs with this provider. Disclaimer – Please be aware and be advised that FXStreet is not an investment advisor. This material is not intended as investment advice.
The financial landscape is still very much in flux, with players on Wall Street waiting with bated breath on these shifts. Today, currency trading is being driven by legal actions and shifting sentiments on risk. Consequently, these realities are set to define investor patterns for years to come.