On Thursday (December 12), the dollar index faced pressure at 106.62, as the U.S. Consumer Price Index (CPI) met expectations and bets on a Fed rate cut surged. Bitcoin surged back above $100,000, and gold surged to $2,718. Israel launched a massive airstrike on Gaza, killing at least 33 people. The United States warned that Russia was preparing to use a new deadly missile against Ukraine.
Israel's massive airstrike on Gaza kills 33
Israeli air strikes continued into Wednesday in the Gaza Strip, with one strike destroying homes where displaced people had taken shelter in the remote north, according to AP News. Palestinian health officials said the attacks killed at least 33 people, including children.
The attack on the house in the northern town of Beit Lahiya, near the Israeli border, killed 19 people, according to Kamel Adwan Hospital, which received the bodies. Hospital records showed that among the victims was a family of eight: four children, their parents and two grandparents.
The Israeli military said the attack targeted a Hamas militant near the hospital. The military said reports of casualties from the attack were inaccurate, but did not elaborate. The military said it tried to avoid harming civilians and accused the militants of hiding among civilians and putting their lives in danger.
Another attack near the entrance on Wednesday killed a woman and her two children, the hospital said. Hussam Abu Safiya, the hospital's director, said an Israeli drone struck a nearby residential area overnight, setting off an explosion that caused panic among more than 120 patients and wounded at the hospital.
“We received calls for help from neighbors and trapped people, but we could not leave the hospital due to the ongoing risk," he said. "We witnessed massive loss of life and there are many martyrs in the targeted areas."
According to Al-Awda Hospital, the decades-old Nusserat refugee camp in central Gaza was hit again, killing at least seven people. The dead included two children, their parents and three other relatives. Later, the hospital said the same camp was hit again, killing four people and injuring 16.
Despite the ceasefire, Israel continues to attack Lebanon almost every day, with an Israeli strike in the south killing at least five people on Wednesday, according to the Lebanese Health Ministry and the state news agency.
In Syria, the Israeli military estimates that it has destroyed 70-80 percent of Syrian military assets in recent days, said an official who spoke on condition of anonymity to discuss intelligence assessments. The military says it has carried out hundreds of airstrikes.
Militants in central Gaza fired four projectiles at Israel on Wednesday, two of which were intercepted, the military said. The other two landed in open areas, with no reports of casualties.
US: Putin preparing to launch 'new lethal missile' at Ukraine
Russia could soon launch its deadly new intermediate-range ballistic missiles at Ukraine again, the U.S. Defense Department said on Wednesday, as both sides vie for battlefield advantage in any talks to end the nearly three-year war.
Sabrina Singh, a U.S. Defense Department spokeswoman, told reporters at a news conference that the strike could take place "in the coming days." She added that the United States did not believe the missile, known as the Oreshnik, would be a game-changer but that Russia was "trying to use every weapon they have to intimidate Ukraine."
She said the U.S. warning was based on a new intelligence assessment, but she could not provide any other details, including where Russia might strike.
U.S. officials, who spoke on condition of anonymity because of the sensitivity of the information, said earlier on Wednesday that the United States saw Russia preparing to launch the missile again, which was first launched last month.
The threat comes as President-elect Donald Trump has vowed to end the war and Western allies have said negotiations could begin this winter. Singh said the United States would continue to support Ukraine, including providing additional air defense systems to protect the country from air strikes. The move came just days after the United States pledged nearly $1 billion in new security aid to Ukraine, including anti-aircraft munitions.
The Russian Defense Ministry also noted that Moscow was ready to retaliate after Ukraine attacked the Taganrog Air Base in the southern Rostov region with six U.S.-made ATACMS missiles on Wednesday, killing and injuring soldiers. The Defense Ministry said two of the missiles were shot down by air defense systems and four others were blocked by electronic warfare equipment.
"We will certainly respond to this attack using Western long-range weapons and take appropriate measures," the Russian Defense Ministry said in a statement.
Violence also broke out outside Jerusalem, according to military and hospital officials. An Israeli bus was attacked by a suspected Palestinian assailant late Wednesday, injuring three people, including a 10-year-old boy. The attack took place on a highway near a major Israeli settlement in the occupied West Bank, and the military was searching for the gunman in areas near Bethlehem.
US CPI meets expectations, Fed rate cut bets surge
The release of the US CPI for November was not surprising: the monthly headline inflation rate rose from 0.2% to 0.3%, in line with expectations. The annual inflation rate rose from 2.6% to 2.7%. The monthly core inflation rate rose by 0.3%, the same as last month. The annual core inflation rate also remained stable at 3.3%.
Stock markets are shaking off Wednesday’s negative performance, with European stocks turning green while U.S. stocks are rising.
The CME Fed Watch tool predicts that the Fed will cut interest rates by another 25 basis points at its meeting on December 18, a reduction of 86.1%. The probability of keeping interest rates unchanged is 13.9%.
The U.S. 10-year benchmark interest rate was 4.21%, down slightly from this week's high of 4.24% on Tuesday.
With all the US data for Wednesday out this week, the main focus will shift to Thursday, with the US Producer Price Index (PPI) and Friday's import and export price index. The focus will also shift to Europe on Thursday, with the ECB announcing its last interest rate decision for 2024.
US Dollar Technical Analysis
FXStreet analyst Filip Lagaart said the dollar index is defining a range that is likely to remain into next year due to the limited number of data points remaining.
The dollar bulls have reclaimed the April 16 high of 106.52, which is a difficult buy point to break. Next is the 107.00 round number mark and the October 3, 2023 high of 107.35. Further up, the November 22 high of 108.7 appears.
Looking down, the key level of April 11 high of 105.53 comes into play before entering the 104 area. If the US dollar index falls all the way to 104.00, the big numbers and the 200-day simple moving average of 104.03 should capture any falling knife pattern.
Gold Technical Analysis
Bruce Powers, an analyst at FXEmpire, said that gold prices continued to strengthen, breaking through Tuesday's high and testing the resistance level near the November swing high of $2,721. Currently, the price of gold has reached the high of the day at $2,721 and continues to trade near the top of the range. Therefore, the price of gold may hit a new high before the close. Before this rise, the price of gold successfully tested the top support of the downward trend line that was broken yesterday.
Given the bullish trend in gold prices after hitting a low of $2,614 on Friday, the pullback seems to be over and the uptrend can continue. Of course, more bullish follow-through is needed to show the sustainability of the uptrend. Wednesday was the third consecutive day of gains since last Friday, and the gains stalled at an obvious possible resistance area.
However, this suggests that the key pivot point that triggered the bullish continuation has been triggered and held. In addition, the possibility of a quick rally above the highs followed by a quick reversal back down should also be considered. In particular, the upward momentum has started due to the intraday bullish reversal that began last Friday.
The longer timeframe weekly chart confirms the bullish signals, with gold prices breaching last week's intra-week pattern high of $2,657 on Monday, sparking an upside breakout. Given the subsequent bullish reaction, the market appears to have recognized the breakout. Gold is now poised to close the week strong, especially if it can reclaim its swing high (B).
A daily close above this high will confirm the continuation of the developing ABCD ascending pattern (green). Once it passes $2,721 (B), it will signal a bullish continuation of the pattern. The initial upside target of the pattern is $2,790 (D). This happens to be the current trend high.
It took a little while, but now gold's momentum is improving with bullish technical signals emerging, and it has the potential to make a big move higher like the first wave after the November bottom. Next, let's see how gold moves at the end of this week and how this will change the picture and bring clues.
Bitcoin Technical Analysis
CoinTelegraph noted that Bitcoin found support around $94,000, while bulls staged a strong rebound on Wednesday. Bitcoin surged above the psychologically key $100,000 level after the November inflation report was in line with economists’ forecasts.
Bitwise investment director Matt Hougan and research director Ryan Rasmussen said in a report that the price of Bitcoin could exceed $200,000 by the end of 2025. In addition to Bitcoin, the two are also bullish on Ethereum and Solana (SOL), predicting that they will rise to $7,000 and $750 respectively.
The sharp rise in Bitcoin is expected to be met with strong selling near the all-time high of $104,088. Failure to break above the overhead resistance level could trigger another round of selling by short-term bulls. This means that Bitcoin is likely to remain volatile in the short term, leading to occasional liquidation of leveraged positions.
Bitcoin rebounded sharply from the 20-day exponential moving average at $96,133, suggesting that the uptrend remains intact.
The bulls must propel Bitcoin above the $101,351–$104,088 resistance zone to signal the resumption of the uptrend. Bitcoin could then rally to $113,331 and subsequently to $125,000.
Contrary to this assumption, if the price turns down and breaks below the 20-day EMA, it will suggest that the bulls are booking profits. Bitcoin could drop to $90,000, which is a critical support level to watch out for.
