Market Analysis – USD slides, AUD hits key level, Gold rallies

Risk on returned to global markets in Thursdays session with equities rebounding strongly on weak US data that refuelled hopes of a faster pace to the Feds rate cutting cycle come 2024.

USD sold off sharply partly due to month-end flows ahead of the holidays but accelerated by a bis miss in Q3 US GDP which came in at 4.9% vs the expected 5.2%. This saw rate cut odds in March push above the 80% mark with yields and the Dollar tumbling as a result.

The Dollar Index (DXY) pushing below last weeks trough to new 5-month lows, also losing the 102 handle in the process.

AUD outperformed after the weaker than expected US GDP reading and an upbeat market risk sentiment. AUDUSD poking its head above the psychological 0.68 for the first time since July before finding some resistance at the big figure. The major resistance at 0.6900 the next big test to the upside if this rally continues.

Gold pushed higher on the weaker USD and falling yields, XAUUSD again testing the resistance at 2047. The last break out of this level took gold to all-time highs a couple of weeks ago, making it a key level to watch for gold traders.

Ahead today the Feds preferred inflation gauge, the PCE price index will be the main risk event for FX traders.