As @leon's comment suggests use a resource file, but I go further.
- Add a folder Resources
- Add a Resources.resx file (rename as required)
- Add your xml file with test data TestData.xml
- Make it embedded resource
- Drag the xml file from the solution explorer to the Resource.resx
- Make sure your TestData.xml resource type is text and not binary
- Compile
Now refer to your test data as
string data = Resources.TestData;