Filed Under:
Forex pairs in this Article » XAU/USD
By: DailyForex.com

The XAU/USD pair closed lower than opening yesterday as the initial rally faded after the bears took over and dragged prices below the 1252 support level. Breaking below 1252 triggered a sell-off which gained momentum after the latest economic data released from the Unite States provided further evidence that the world's biggest economy is continuing to improve along the lines that the Fed expects.

According to Commerce Department figures, retail sales climbed %0.7 in November but a Labor Department report showed that first-time filings for unemployment benefits jumped by 68K to 368K. It appears that fairly positive data we got since last week, coupled with bipartisan budget agreement reached just a couple of days ago, stoked speculations that the U.S. central bank will begin its exit strategy as early as next week. The policy-setting Federal Open Market Committee’s next meeting is scheduled for December 17-18.

Currently the XAU/USD pair is hovering just above the 1225 support level. However, prices are below the Ichimoku cloud on the 4-hour time frame and we have a bearish Tenkan-sen (nine-period moving average, red line) - Kijun-sen (twenty six-day moving average, green line) cross. Short term technical outlook indicates that selling could continue to the next support area between 1213 and 1200, if the 1225 level fails to hold the market.

XAUUSD H4

A daily close below the 1200 level could accelerate downward movement and clear the path to the June 28 low of 1180.21. If prices turn bullish from here, there will be a bunch of intra-day resistances at 1233, 1237 and 1242. The bulls will have to climb above 1242 in order to revisit 1251.60.

XAUUSD Daily

comments powered by Disqus
Trading Center