By: DailyForex.com
Gold prices (XAU/USD) settled higher yesterday, as weakness in the U.S. dollar helped buyers. The XAU/USD pair traded as high as 1476.73 after prices changed direction at the 1442 support level. Also surprising Chinese trade data, which showed a solid improvement in shipments helped widen the trade surplus to $18.2 billion in April, lured buyers back to the market. As a result, we remained within the last eight days trading range. The gold market is slightly bullish at time of writing and it looks like we are getting ready to test the top of this recent (1486 - 1442) consolidation area. From a technical point of view, short-term and long-term charts are giving us mixed signals.
The 4-hour chart is favoring the bulls at the moment but prices are still below the Ichimoku cloud on the daily and weekly time frames. Because of that, I will remain neutral on the XAU/USD pair until we breach either the 2 week high, or low. To the downside, the bears will need to break the 1442 level in order to gain more momentum. If the bears are successful in their attempts to clear this zone, they will next encounter support at 1430 and 1411. To the upside, the bulls have to overcome the resistance level of 1486. If the bulls break through, I think they will have enough power to tackle the 1532 resistance level. If that is the case, expect to see resistance at 1498 and 1505. Today sees release of closely watched jobless claims data, so expect some volatility.
