The market had an interesting session on Wednesday as the battle between the bulls and bears intensified. The XAU/USD fell as low as $1243.64 earlier in the day on better-than-expected U.S. jobs data, but recoup most of its earlier losses as the greenback weakened following the release of the minutes from the most recent Federal Open Market Committee meeting. The ADP Research Institute said businesses added 263K employees in March after a downwardly revised 245K gain in the prior month. “With their views of the outlook for the economy little changed, participants generally continued to judge that a gradual pace of rate increases was likely to be appropriate to promote the Committee’s objectives of maximum employment and 2 percent inflation,” the Fed said in the minutes.
The key technical resistance level which the market failed to break through three times this year stands at around 1261. Beyond that, the 1265 level stands out as an obvious key resistance. A breach of this barrier would push XAU/USD towards 1277.35-1276.
The bears will have to clear nearby supports such as 1252/0 and 1242/39 in order to gather momentum for 1235.30. If the support at 1235.30 is broken, then 1231 will be the nest stop. Closing below 1231 implies that the market is getting ready to test the 1227/5 area.
