On Friday (September 13), the US dollar index fell back to 101.17, gold surged to $2,558, and Bitcoin rebounded back above $58,000. The US Producer Price Index (PPI) and initial jobless claims supported the pricing of the Fed's dovish rate cut in September. Russia counterattacked Ukraine in the Kursk region, Western allies will reach an agreement on Russian missile attacks, and Russian President Putin threatened to start a war. Israeli air strikes killed at least 18 people in a war-displaced civilian shelter in Nusserat.
Putin launches surprise counterattack on Ukraine: Western allies to reach agreement on Russian missile attack
CNN reported that Russia launched a counterattack in the Kursk border region, where Ukrainian troops launched a surprise cross-border incursion in August. Ukrainian President Volodymyr Zelensky said at a press conference on Thursday: "Russia has begun a counter-offensive." This is his first comment since reports of Russia's counterattack in Kursk.
He said Ukraine had been expecting a Russian response and that the counterattack was in line with the "Ukrainian plan." He had previously said that the surprise attack on Russia's Kursk region was the first step in a four-part "victory plan."
The Russian Defense Ministry said in a statement on Thursday that Russian troops had "infiltrated" the Kursk region and occupied 10 settlements. A social media video geolocated by US media showed a Russian mechanized assault team stationed in the settlement of Snagovest on the western edge of the Ukrainian-controlled area.
Ukrainian troops rushed into the Kursk region with lightning speed on August 6, catching even U.S. officials off guard. It was the first foreign attack on Russian territory since World War II, with thousands of troops crossing the border into the region with heavy weaponry.
Britain and the United States will hold a summit at the White House on Friday to discuss plans to allow Kiev to use Western-supplied missiles to strike targets inside Russia, taking a decisive step in the war in Ukraine, Politico reported.
Putin warned late Thursday that he believed such a deal would be tantamount to NATO going directly into war. "This means that NATO countries, the United States and European countries will go to war with Russia," he said.
The threat came as British Prime Minister Keir Starmer was en route to Washington for talks with U.S. President Joe Biden on Friday over the possible use of British-made Storm Shadow cruise missiles on Russian territory by Ukraine. "Russia started this conflict," Starmer said. "Russia illegally invaded Ukraine and Russia can end this conflict immediately."
Israeli airstrike kills 18 civilians at shelter
Al Jazeera reported that an Israeli air strike killed at least 18 people at a shelter for war-displaced civilians in Nusserat, including six staff members of the UNRWA head, which the head of UNRWA condemned.
Israel launched a series of attacks on several houses in the Nusserat refugee camp in central Gaza, killing six Palestinians, bringing the day's death toll to at least 40, according to medical sources.
The USS Theodore Roosevelt is coming home, ending a rare move by the Pentagon to keep two U.S. Navy aircraft carriers in the Middle East for weeks amid concerns about a wider war.
According to the World Health Organization, about 25% of those injured in Israel's war on Gaza - at least 22,500 Palestinians - suffered "life-changing" injuries.
U.S. PPI, initial jobless claims suppress the dollar index
The dollar fell against major currencies as the latest U.S. labor market and inflation reports sent dovish signals.
Initial claims for unemployment benefits, a proxy for layoffs in the United States, increased to 230,000 in the week ended September 7, in line with expectations and slightly above the previous week's upwardly revised 228,000.
Initial jobless claims, seasonally adjusted, were unchanged at 1.2%, with the 4-week moving average rising to 230.75K.
The U.S. final demand PPI rose 2.2% year-on-year in July, lower than market expectations of 2.3% and the previous increase of 2.7%.
The core PPI rose 2.4% year-on-year, lower than the market expectation of 2.7%. The core PPI rose 0.1% month-on-month and remained unchanged.
CME's Fed Watch tool shows that the probability of the Federal Reserve cutting interest rates by 50 basis points in September is 13%, the same as before the PPI announcement.
The reports suggested the U.S. labor market remained resilient despite economic headwinds, while inflation pressures may be easing, supporting the Federal Reserve's dovish stance.
US Dollar Technical Analysis
FXStreet analyst Patricio Martín said that the technical analysis indicators of the US dollar index have resumed their downward trend and are in negative territory. However, the index returned to the vicinity of the 20-day simple moving average (SMA) during the week, reaching 101.60. This breakthrough improves the short-term outlook, and the priority for buyers is to hold this level.
The relative strength index (RSI) and moving average convergence divergence (MACD) indicators remain in negative territory, indicating bearish momentum. However, both indicators are showing some signs of upward movement, which could signal a possible trend reversal.
Gold Technical Analysis
Bruce Powers, an analyst at FXEmpire, said that on Thursday, gold continued to rise and the bull market broke out to a new high. On that day, gold started from the support level near the 20-day moving average and then broke out of the narrow consolidation range for three weeks to set a new high of $2,559.
Recently, the range has begun to take on an ascending triangle pattern, reflecting an improvement in demand, the results of which will be seen on Friday. Trading continues near the day's highs, and gold will end today's trading in a strong position, near the high of the day's range.
Since the peak in April, gold has basically been in an upward consolidation pattern. First it was a rectangle, then a symmetrical triangle, and finally a small rectangle, which then evolved into an ascending triangle.
These patterns could be setting the stage for accelerated upward momentum that began with today's breakout. They are consolidation patterns that are getting shorter over time and are moving into higher price territory as they progress, thus showing improving momentum.
Gold has seen a massive rally since reaching a high of $2,431 in April. This high was a gain of 447 points, or 22.5%, from the February swing low in 41 days. The acceleration portion of the rally began on February 29, when the bull market broke out of the symmetrical triangle. Alternatively, when starting to measure the rally from that day's low to the April high, gold gained 403 points, or 19.9%, in 30 days. With the current breakout, will gold see a similar move? There are a few ways to look at it.
When starting an ascending ABCD pattern from the February swing low, to the April peak as the AB leg of the pattern, and then adding the price distance to the May swing low, the initial target of the pattern is established as $2723. However, if Thursday's low is used as the starting point and the measured percentage move from the March 1 low is added to it, the potential upside target is $3011. This is not a prediction, just analysis to be aware of.
Bitcoin Technical Analysis
FXStreet analyst Manish Chhetri said that the price of Bitcoin retested the daily support level of $56,022 during the week and rebounded from it. On Thursday, the price of Bitcoin continued to rise, reaching a high of $58,552.
If the daily support at $56,022 holds, Bitcoin could continue to rise to $59,529, which is the 50% price retracement level from its late July high to early August low.
The rise in Bitcoin price is also supported by the Moving Average Convergence Divergence (MACD) indicator on the daily chart, with the MACD line (12-day exponential moving average, blue line) rising above the signal line (26-day exponential moving average, yellow line), giving a buy signal. It is showing green histogram bars above the zero line, also indicating that the asset price may have upward momentum.
However, the bullish thesis will be invalidated if Bitcoin closes below $56,022. In such a scenario, Bitcoin could fall another 3.5% to retest its psychologically important level of $54,000.
