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

The XAU/USD pair tried to climb towards the 1268 resistance level yesterday but ran out of steam after weaker than expected gross domestic product and industrial production data out of China boosted worries about economic growth. Gold traded as high as $1261.38 an ounce but immediately pulled back. Since Chinese gold consumption plays an important role in the market, data revealing that China's expansion was losing momentum put pressure on prices. Although trading was subdued, with U.S. markets closed for the Martin Luther King holiday, trading below the 1255 level might be a sign of weakness.

XAUUSD H4 12114

From a technical point of view, I think paying more attention the 4-hour chart seems to be a better idea at the moment because the XAU/USD pair entered inside the Ichimoku clouds (the daily chart). This suggests that the market is looking for a direction. Because of that I would prefer watching the ongoing battle between the bulls and bears from the sidelines. Intra-day traders should pay attention to the 1268 and 1245 levels as we oscillate around 1255. If the bulls gain some strength and push the pair above the 1268 level, then it is entirely possible that we will see the pair challenging 1307/15.

XAUUSD Daily 12114

On its way up, there will be resistance at 1277 (Fibonacci 38.2) and 1286.70 (the upper line of the cloud). Failing to hold prices above the 1255 level means we will probably revisit the support at 1245. If prices fall below 1245, expect to see support at 1235 and 1225. Closing below 1225 on a daily basis would suggest that the bears are aiming for 1213.

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