By: DailyForex.com
Gold prices initially fell yesterday but rebounded well off the daily lows and closed the session slightly higher. The XAU/USD pair retreated to the 1237/5 area as expected after the 1243/2 gave way but the Ichimoku cloud on the 4-hour chart provided enough support to recover. While yesterday’s candle which left a long lower shadow suggests that buying interest emerges on dips, the market still resides below the cloud on the H1 chart. The market has to climb and hold beyond the 1253/2 area occupied by the hourly cloud in order to set sail for 1258.
A break up above 1258 would be a positive sign and help the bulls tackle the 1265/1 zone, which is the first significant barrier ahead. However, if the market can’t hold above 1246, we may head back to the 1243/2 region. The bears will have to demolish that support so that they can make a fresh assault on 1237/5. A break below the bottom of yesterday’s hammer would imply that the market will be targeting 1231/29 afterwards.
