Forex pairs in this Article » XAU/USD
XAU/USD pair ended yesterday's session higher than opening as the conditions in the marketplace have increased the precious metal’s safe-haven appeal. Data released yesterday showed that producer price index was unchanged in July. Gold also drew strength from Federal Reserve Bank of St. Louis President James Bullard's comments on quantitative easing. Bullard said “The Committee still needs to see more data on macroeconomic performance for the second half of 2013 before making a judgment on this matter”. He also noted that the labor sector has improved since the Federal Reserve adopted its current asset purchase program in September 2012 but the labor force participation rate was still weak. Although I believe that the central bank will begin to wind down quantitative easing, I don't see a technical reason to sell gold at the moment. The XAU/USD pair is trading above the Ichimoku clouds on both the daily and 4-hour charts and in addition to that we have bullish Tenkan-sen (nine-period moving average, red line) - Kijun-sen (twenty six-day moving average, green line) crosses. Basically the overall trend is up when prices are above the cloud, down when prices are below the cloud and flat when they are in the cloud itself. So speaking strictly based on the charts, it seems that there is still some room for the pair to run higher. If the bulls intend to charge, a close above the 1347 resistance would be necessary to gain enough traction to tackle 1354.50 and 1365.80. Breaking above 1365.80 would suggest that 1376 might be tested. However, if the pair encounters heavy resistance and prices reverse, support may be found at 1326, 1318 and 1308. Today sees release of important economic reports from the United States such as employment claims, consumer price index and industrial production, so expect volatility.