By:DailyForex
Gold has erased its earlier losses and is trading near unchanged in afternoon U.S. trading. Prices are stalling after Friday’s downside price action as market players await speeches from Federal Reserve officials. The U.S. dollar had a boost after a strong employment report bolstered the case for further Fed tightening.
XAU/USD is currently trading within the borders of the Ichimoku cloud on the 4-hour chart. Basically 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 daily cloud is right below and continuing to act as a support.
With these in mind, I think it makes more sense to wait until we break out of this consolidation area. The initial resistance sits in 1264/2, followed by 1267.A break through there would pave the way for a test of the 1274/1 zone. On the other hand, if the market dives below the Ichimoku cloud on the H4 chart, we may visit to the 1250-1247.89 area.