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

Gold prices remained under selling pressure and closed the day lower than opening after better than estimated housing and consumer confidence data out of the world's largest economy reinforced expectations the U.S. Federal Reserve will scale back stimulus this year. Data released by the Conference Board showed that its consumer confidence index climbed to 81.4 in June from 74.3 the prior month and the Commerce Department said sales of new homes rose 2.1% to an annualized pace of 476K homes from 466K. Another report showed that demand for durable goods increased by 3.6% in May. In the meantime, large financial institutions continue to cut their forecasts for 2014 and 2015. During the Asian session today, the short term charts indicate that the bears continue to dominate the market.

The XAU/USD pair is testing the 1266 support by the time of writing and as I mentioned in my previous analysis, breaking below this support might trigger another sell-off targeting 1240. Since prices remain below the Ichimoku cloud almost on all time frames, I have no intention of buying. The daily and weekly charts show that technical outlook of the market is weak. Until this picture changes I will be on the bear's side.

XAUUSD Daily


From an intra-day perspective, support can be found at the bottom of the descending channel which currently sits at 1255. If this support gives way, I think we are going to test 1240 and 1218 eventually. If the bulls take over and the prices reverse, expect to see resistance at 1290, 1300 and 1320. Only a successful close above the Ichimoku clouds on the 4-hour time frame (1332) could ease the speculative selling pressure.

XAUUSD 4hr


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