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

The XAU/USD pair closed lower than opening for a second consecutive day on growing perception that the data which will be released from the United States ahead of next week's FOMC meeting will beat expectations and bolsters the case for the Fed to continue scaling back its massive stimulus. At its January 28-29 meeting, the Federal Reserve is expected to stick to its strategy of gradually reducing monthly asset purchases.

The XAU/USD pair hit a 9-day low of 1231.92 during today's Asian session. Looking at the charts from a purely technical point of view, I think breaking below the 1235 support level is a negative situation and also suggests that lower prices will come. Recently I have been repeating that the Ichimoku clouds on the daily time frame define the borders of a critical resistance and it could be quite powerful as it coincided with the bearish channel dating back to September.

XAUUSD Daily 12314

Today, on the 4-hour chart, the pair is back below the clouds and we also have a bearish Tenkan-Sen (nine-period moving average, red line) - Kijun-Sen (twenty six-day moving average, green line) cross. If the bulls fail to push prices above the cloud, I think we will be testing the support at 1225. A close below this level might give the bears the strength they need to tackle the 1213 support level. Climbing back above the 1245 level should ease selling pressure and help buyers to revisit the first important barrier at 1255. Once above that, the next stop will probably be the 1268 level. In the meantime, I will also keep an eye on the USD/JPY pair and major stock exchanges.

XAUUSD H4 12314

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