Amid a dynamic market milieu, the volatile EUR/USD currency pair has cut most of its gains, even trading under the 1.1650 level. Having gained more than three-quarter of a percent in the last session, EUR/USD now trades near 1.1630. That movement continues through the Asian hours on Tuesday. This return continues the weakness seen all the way back since Sunday, increasing the worry for investors over possible downside risk.
That recent plunge in the EUR/USD exchange rate comes at a time of remarkable political turmoil in the United States. US President Donald Trump had made the political decision to fire Federal Reserve Governor Lisa Cook. This decision has sparked new debate about the impartiality of the Federal Reserve. The market has already begun to respond to this news. This reaction underscores the possibility that the downside risk for EUR/USD may be less than meets the eye.
Meanwhile, the gold market remains resilient. Gold is poised to test firm resistance at $3,400. It’s currently being propped up by altitudes higher than $3,350 and a daily bullish Relative Strength Index (RSI). The ongoing turbulence in financial markets has contributed to gold’s appeal as a safe haven asset, especially in light of concerns surrounding the Federal Reserve’s governance structure following Cook’s dismissal.
In the backdrop of these currency and commodity changes, the cryptocurrency market has undergone a serious bathtub plunge. In just the past 24 hours, liquidations in this industry have made up a shocking $935.44 million. Bitcoin dipped below $110,000, and Ethereum dipped below $4,500 on Monday. Other cryptos, such as Fartcoin, OKB, and CRV, were greatly affected in their price plunge. This drop contributed to the overall depressed market sentiment.
GBP/USD price action As the US trading day comes to a close, GBP/USD has inched down toward the 1.3450 level during the early European session on Tuesday. This sharp decline mirrors a larger trend on the forex market. Investors are in the process of actively re-pricing their bets based on these new facts on the ground.
The subsequent pullback in EUR/USD has led to a bigger wipeout of retail leverage in the derivatives market. Traders are reacting to the latest political and economic headlines. As a consequence, most are down immensely on their over-leveraged bets.
Despite these challenges, one area of investment shows promise: AI technologies. Investment in AI 2.0 has thus far exceeded hundreds of billions, though monetization is still thin on the ground at this early stage. Many investors are just as keen to see their investments in artificial intelligence proven out. This change from “build it” to “prove it” really gets at what they’re feeling right now.
“AI 2.0 = from “build it” to “prove it”” – AI boom or bubble? Three convictions for investors