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The US Dollar has continued its year end decline after the holiday break in thin volume. Traders still holding onto the view of a dovish Fed come 2024 seeing yields also drop creating a headwind for the Greenback.
The Aussie pushed has pushed higher this week, taking advantage of a weak USD and a risk on environment. AUDUSD breaking the resistance and key psychological level of 0.68 in Tuesday’s session and entering the Resistance zone from 0.6800 -0.6900 where rallies have faltered previously in 2023. The AU 10 and US 10 yield differential has also found some resistance at its current level and could temper further gains in this pair, AUDUSD looking like it has got a little ahead of itself at these levels.
Gold also continued to grind higher in thin holiday volume, a weak USD and falling yields making the non-yielding asset look more attractive to speculators. XAUUSD trading at the key level of 2070 USD an ounce that gold traders should be keeping a close eye on. The last time XAUUSD broke this level was December 4 when a surge in price saw gold hit all-time highs. Currently XAUUSD has found resistance here and attempts to breach have been rejected, a push through could see another run to re-test those highs, a hold of the resistance and a leg lower in XAUUSD looks likely.
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