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Forex pairs in this Article » XAU/USD

The XAU/USD pair had an extremely bullish session after the outcome the Federal Open Market Committee's policy meeting surprised market participants and U.S. housing data came out weaker than forecasts. The Federal Open Market Committee said that it “decided to await more evidence that progress will be sustained before adjusting the pace of its purchases. Accordingly, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month” at the conclusion of a two-day meeting yesterday.

Fed Chairman Ben Bernanke said “Conditions in the job market today are still far from what all of us would like to see” at a press conference after the announcement. Since the markets have been expecting some sort of reduction in the quantitative easing program, the American dollar lost strength across the board and gold prices jumped to a one-week high.
The XAU/USD pair traded as high as 1368.11 during today's Asian session. Tapering is off the table for now (at least until the December 17-18 meeting) so investors' focus will probably shift to U.S. debt ceiling and situation in the Middle East region. Looking at the charts from a purely technical point of view, I think that yesterday's candle which engulfed the previous three candles is highly positive and indicates that higher prices will come.
If the bulls can hold prices above the 1360 level, then they may have another chance testing the 1380 and 1395 resistance levels. However, as we see on the 4-hour chart, prices are inside the Ichimoku clouds and these clouds often act as strong resistance (or support depending on its location). Because of that, it is entirely possible to some pull back before heading higher. To the downside, expect to see support at 1353, 1345 and 1333.

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