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Forex pairs in this Article » XAU/USD

Gold gave up some of its recent gains against the American dollar during yesterday's session on the back of the solid U.S. economic figures. Data released from the Labor Department report showed that initial unemployment claims decreased 23K to 298K and the Commerce Department reported that gross domestic product rose at a 3.6% annual rate. Since the Federal Reserve tied future monetary policy (i.e. that altering the pace of asset purchases) to specific unemployment, investors will pay close attention to the U.S. non-farm payrolls data due later today.

Recent price action suggests that neither the bulls nor the bears have enough power to overcome certain support/resistance levels and because of that I would like to wait until this intense battle is over. As my readers know, I don't try to find bottoms or tops. I just set my traps (technical levels based on the charts) and wait. From a technical point of view, I don't have a reason to buy gold until the prices hold above the Ichimoku clouds on the 4-hour chart. If that happens, I might join the bulls for a ride back to 1268 - 1293 zone.

XAUUSD Daily 12613

For now, the 1293 level -where the bottom of the Ichimoku cloud (on the daily time frame) and the top of the descending channel converge- looks resistive so I believe we will witness heavy selling pressure if prices climb that high. To the downside, I see some support between the 1225 and 1213 levels. Therefore, the bears will have to drag the XAU/USD pair below this level to increase pressure. If the pair drops below the 1213 level, it is possible to see a bearish continuation to the next key support level of 1200.

XAUUSD H4 12613

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