Gold continued to gain ground against the American dollar as the conditions in the marketplace increased desire for safe haven diversification. After four consecutive days of gains, the XAUUSD pair (Gold vs. the American dollar) hit the highest level since September 11 during the Asian session today.
Although a series of economic data out of the United States came out better than forecasts, market players are tending to avoid risk and aren’t focusing much on the improvements in the U.S. economy. The Commerce Department reported that retail sales rose 0.3% and the Labor Department's figures showed that initial jobless claims dropped by 9K to 315K. The risks of an escalation in Ukraine have caused investors to take profits off the table and use it to bolster their gold holdings.
From a purely technical point of view, trading above the Ichimoku clouds on the daily and 4-hour time frames gives an advantage to the bulls but I consider the 1376 resistance as a critical barrier which might block the bulls' advance. The Ichimoku clouds are right on top of us on the weekly chart so technically I would expect to see more resistance in the 1376 and 1438 region. If the bears take the reins and defend the 1376 level, we will probably see prices falling to around 1367 - 1363.
If this support gives way, it is likely that the pair will visit the 1355 support (former resistance) level next. The bulls will have to capture the strategic fort at 1376 in order to gain more power to challenge the bears at 1384.50 and 1392.
