#AITradingAffectsForex AI-driven forex strategies for trading during credit crunches focus on identifying liquidity risks, adjusting risk exposure, and capitalizing on volatility. Here’s how AI optimizes forex trading during such financial crises: 1. Sentiment Analysis & Macro Trend Detection AI-powered Natural Language Processing (NLP) analyzes financial news, central bank statements, and market sentiment from social media to detect early signs of a credit crunch. • Risk-On vs. Risk-Off Sentiment: AI identifies shifts toward safe-haven currencies (USD, JPY, CHF) as investors seek stability. • Central Bank Policy Tracking: AI monitors interest rate decisions, liquidity injections, and monetary easing to predict currency movements. Example: If AI detects a surge in fear-based sentiment, it may suggest shifting to USD or gold-backed currencies. 2. Liquidity Monitoring & Volatility Prediction During a credit crunch, market liquidity declines, leading to higher volatility. AI models track: • Order Book Imbalances: AI identifies when buying or selling pressure dominates. • Bid-Ask Spread Analysis: AI detects widening spreads, signaling liquidity risks. • Historical Volatility Models (GARCH, LSTM): AI predicts future volatility spikes based on past crises. Example: If AI sees a rapid widening