The XAUUSD pair started the week with a gap to the upside as data out of the United States last week reinforce expectations the U.S. Federal Reserve will remain hyperactive and keep purchasing assets at a pace of $85 billion a month. Although the economic calendar is pretty heavy this week, gold market investors will be waiting for the central bank's decision. If we see a strong commitment from the Fed to continue quantitative easing measures (i.e. printing money) to stimulate the economy, the bulls may find the extra support they need to break through the strong resistance levels ahead. With this in mind, I will be watching 1486 (a former resistance/support level) and 1444 which is the upper line of the Ichimoku cloud on the 4-hour chart.
From a technical point of view, despite the recent bullishness, the daily and weekly charts remain bearish; prices are below the clouds and the Tenkan-sen line (nine-period moving average, red line) is below the Kijun-sen line (twenty six-day moving average, green line). Because of that, the resistance zone between 1444 and 1398 will be crucial and the bulls have to defend it well. A weekly close below this area would confirm that the bears will be dominating the XAUUSD pair for some more time. From an intra-day perspective, expect to see some additional support at 1430 and 1411. To the upside, there are some strong resistance levels for the buyers to break through. However, if the bulls capture the 1486 level, we could possibly see the bulls make a run for 1498 or 1505 before a pull-back occurs.
