Gold prices rose %0.9 over the course of the week after the bulls managed to hold prices above the 1200 level. But the pair formed an inside week pattern, meaning that the entire weekly trading range was within the price range of the previous week. In my previous analysis, I had told that the downside might be limited with players taking profits to close their books before leaving for the New Year holidays so this small bounce is not really surprising.
On the 4-hour chart, we can see that the XAU/USD pair tried to break through the Ichimoku clouds but encountered resistance as expected. Technically speaking, the overall trend is up when prices are above the cloud, down when prices are below the cloud and flat when they are in the cloud itself. The first hurdle gold needs to jump is located around the 1225 level, the top of Ichimoku cloud on the 4-hour time frame.
If the bulls take the reins and push the pair above that level, we may see a bullish attempt to test the 1237 level. Since this level acted as both support and resistance in the past, the bulls will need to capture this strategic point in order to gain more momentum and head towards the 1252 resistance level. To the downside, expect to see some resistance between the 1205 and 1195 levels. Closing below this level would make me think that 1188 and 1180 will be the next targets.
