Gold Edges Higher Ahead of Yellen Testimony - 12 July 2017

Gold prices rose yesterday, edging further away from a 4-month low struck earlier this week, as the dollar weakened ahead of an appearance by Federal Reserve chair Janet Yellen in front of a congressional committee. Despite the negative outlook, daily charts show a short-term bottoming out above the $1208-$1205 area.

XAU/USD is trading above the Ichimoku clouds on the 1-hour and 30-minute charts. In addition to that, the Tenkan-sen (nine-period moving average, red line) and the Kijun-sen (twenty six-period moving average, green line) are positively aligned on both time frames. If the bulls successfully penetrate the initial barrier in the 1220/18 area, we may see a push up to the 1228 level, which happens to be the bottom the 4-hourly cloud. A break through there brings in 1232.

XAUUSD Daily

However, if XAU/USD breaks down below 1208/5 and takes out Monday's low, then the market will probably head towards the 1197/4 area afterwards. Falling through this key support could trigger a drop to 1188. A daily close below 1188 implies that the market is ready to test the 1180 level.

XAUUSD h4

Alp Kocak
Alp Kocak has been trading Forex since 2003. He writes technical analysis based on Japanese candlesticks and Ichimoku Kinko Hyo.