By: DailyForex.com
Gold prices continued to move higher yesterday as the American dollar weakened across the board after comments by European Central Bank President Mario Draghi eased worries over the EU economies. President Draghi said “Euro-area economic activity should stabilize and recover in the course of the year, albeit at a subdued pace. We will monitor very closely all incoming developments and we stand ready to act”. The selloff in Japan's Nikkei and USD/JPY pair also provided support for gold. The main event of the day clearly will be the release of the official employment figures. Since the speculations that the Fed is considering an early withdrawal of quantitative easing at its next policy meeting have been weighing on the XAU/USD pair, I think today's non-farm payrolls report will draw more attention than usual.
Today's data will likely to offer a hint about what the central bank will decide to do with its quantitative easing program. Based on the weekly and daily charts, there are strong resistance levels ahead. However, a weekly close above the 1414 would be highly positive for gold prices. If that is the case, I will look for 1420, 1430 and 1442. To the downside, support can be found at the 1400 and 1387 levels which define the borders of the Ichimoku cloud on the 4-hour time frame. A daily close back below the Ichimoku clouds could change the short-term technical outlook as well. That means the bears will be targeting the 1372.50, 1360 and 1354.50 levels next.
