The XAU/USD pair (Gold vs. the American dollar) closed yesterday's session with a loss but remained within the last two days of trading range. Currently the pair is trading at $1288.58 an ounce and prices are steady during the Asian session today. The market has been bearish since the bulls failed to overcome the resistance around the 1340 level and as a result we are back to the 1286 level.
Since the market found both support and resistance between the 1286 and 1268 levels several times in the past 13 months, I think the bulls will have to defend this castle if they don't want to give up. Prices are moving inside the Ichimoku clouds on both the weekly and daily time frames and as I pointed in my previous analysis that indicates a range bound movement. Although the short-term directional bias remains weighted to the downside, the bears have to drag prices below the 1286/77 zone in order to increase their strength.
If the market breaches that support, the pair may extend its losses and head towards the 1268 level where the bottom the cloud sits on the weekly chart. To the up side, there will be hurdles in the way such as 1292 and 1297. If the bulls take the reins and push prices above 1297, it is likely that we will see the XAU/USD pair testing the next resistance level at 1303. Closing above the 1303 level at least on a daily basis would suggest that it is technically possible to see a bullish continuation targeting the 1312 level.