CoinWorld reported on Wednesday (October 23) that the US dollar index maintained a bullish trend at 104.08, stimulated by the decline in the US stock market and the rise in US bond yields. Gold surged to $2,746, hitting a new historical high, as Israel killed an official who was expected to become the next leader of Hezbollah and launched large-scale air strikes on the suburbs of Beirut. Bitcoin, at $67,200, remains in a battle between bulls and bears and has yet to firmly break through the key resistance level of $70,000.
According to AP News, Israel stated on Tuesday that an airstrike launched earlier this month on the outskirts of Beirut killed a Hezbollah official named Hashem Safieddine, who was widely expected to replace the long-time leader of the extremist organization, Hassan Nasrallah, who was killed in an Israeli airstrike in September. Hezbollah has not immediately confirmed Safieddine’s fate, as he is a religious figure.
According to Israel, Safieddine was killed in an attack in early October, which also resulted in the deaths of 25 other Hezbollah leaders. In recent months, Israeli airstrikes in southern Lebanon have killed multiple senior Hezbollah leaders, plunging the organization into chaos.
Last week, Israel killed the leader of Hamas, Yahya Sinwar, in the Gaza conflict.
US Secretary of State Antony Blinken, during his visit to Israel on Tuesday, stated that Israeli leaders should “take advantage” of Sinwar’s death as an opportunity to end the Gaza war and secure the release of hostages kidnapped in the deadly Hamas attacks that triggered the war. Blinken also emphasized that Israel needs to take more action to help increase humanitarian aid to the Palestinians.
On Tuesday, the Beirut suburbs where Safieddine was killed were subjected to a series of new airstrikes, with one building completely destroyed. Israel claimed that the building housed Hezbollah facilities. The collapse of the building caused smoke and debris to fill the air, just a few hundred meters away from where a Hezbollah spokesperson had just informed reporters of the location of the drone attack that damaged Netanyahu’s residence over the weekend. There have been no reports of casualties.
Hezbollah’s chief spokesperson, Mohammed Afif, stated that the organization was behind the drone attack on the coastal town of Caesarea targeting Netanyahu’s residence. Israel stated that the Prime Minister and his wife were not at home during the attack.
Blinken’s meeting with Israeli Prime Minister Netanyahu and other Israeli leaders is his 11th visit to the region since the outbreak of the war between Israel and Hamas. Just hours before Blinken’s arrival in Israel, Hezbollah fired a series of rockets at central Israel, triggering air raid sirens in densely populated areas and the international airport, but causing no apparent damage or casualties.
On Monday night, Israeli airstrikes destroyed several buildings opposite Beirut’s largest public hospital, killing 18 people and injuring at least 60. The Israeli military stated that the airstrikes were targeting Hezbollah, but did not provide detailed explanations, and stressed that the airstrikes were not targeting the hospital itself.
The US dollar breaks through the 104 level: rising US bond yields and IMF growth forecasts support the market
Currently, the market is betting heavily on the possibility of two 25 basis point rate cuts by the Federal Reserve in 2024, but everything depends on future data.
The updated growth forecast by the International Monetary Fund (IMF) is expected to benefit the US economy and help it continue to outperform other economies, thereby supporting the rise in US Treasury yields and the strengthening of the US dollar, which may prompt Federal Reserve officials to take a more cautious stance.
Higher US Treasury yields are attracting inflows of foreign capital, providing further support to the US dollar.
After a strong rise in 2021, the stock market is experiencing a sharp decline due to widespread profit-taking.
Geopolitical concerns over the Russia-Ukraine conflict and tensions in the Middle East have intensified this risk-off environment.
With the US economy continuing to outperform most other major economies, divergent themes remain active.
US Dollar Technical Analysis
FXStreet analyst Patricio Martín stated that the US dollar index has broken through the 200-day moving average, but the weakening buying momentum suggests that it may struggle to stay above this level. Therefore, the index may trade sideways in the short term.
The Relative Strength Index (RSI) remains steady in the overbought zone, and the Moving Average Convergence Divergence (MACD) shows flat green bars.
Support levels are at 103.50, 103.30, and 103.00, while resistance levels are at 103.80, 104.00, and 104.30.
Gold Technical Analysis
FXEmpire analyst Bruce Powers stated that gold prices continued to show strength on Tuesday, approaching the daily high and closing strong, above the upper one-third of the daily trading range. In addition, the high on Monday and the previous high were $2,741. Gold prices are currently above this level, which is another sign of gold’s strength.
The main target price for gold of $2,815 comes from the bullish flag pattern, which gold broke out of last week. Subsequently, gold prices continued to rise after the breakout. However, there is no guarantee that gold will reach the target price of $2,815, or the path it will take to reach that target price.
On Wednesday, gold prices face potential resistance near the upper trendline of the ascending channel. Gold has not clearly broken through this channel, which means the channel may still act as a resistance zone. Moreover, if gold prices decisively rise above Tuesday’s high, it may break through this channel.
The target retracement level after the peak in March 2022 is $2,754, which is the 250% extension retracement level of the decline in 2022. This may imply something or it may not. The reaction of gold prices in this price area should provide clues. The next higher target of the same retracement level is the 261.8% extension level at $2,808.
This coincides with the target area of the flag pattern, and if combined with the 200% extension target of the September 2011 decline at $2,797, it indicates a significant resistance zone between $2,797 and $2,815. Since the $2,797 target comes from a very long-term measurement, it may have greater significance, and close attention should be paid if it approaches that target.
If resistance is seen subsequently from Tuesday’s high, the low may be a near-term support level at $2,719. If it fails to hold, it may eventually test the support level near the 20-day moving average at $2,664, which is close to the lower channel line. However, the characteristics of the pullback should lay the foundation for the next rise in gold prices. The recent strength is a bullish follow-up trend that began with the breakout of a multi-year bottom in February.
Bitcoin Technical Analysis
CoinTelegraph pointed out that Bitcoin closed above $69,000 last week, reaching the highest closing price since early June, but fell below $67,000 on Tuesday and then made a slight recovery. The short-term decline did not scare away investors, as according to Farside Investors data, on October 21, US Bitcoin exchange-traded funds (ETFs) received an inflow of $294.3 million.
Usually, after hovering within a range for a long time, a strong trigger is needed to break the sideways price trend. The upcoming US presidential election could be a catalyst for a new trend in Bitcoin. Many believe that the November victory of former US President Trump could push Bitcoin higher.
Although the long-term prospects for Bitcoin remain intact, there are signs of weakness in the short term. Emperor, a well-known opinion leader, told his followers that a drop to $62,000 to $63,000 could be a buying opportunity.
Bitcoin has fallen significantly from the resistance level above $70,000, indicating that bears are active at higher levels.
The $66,500 to $65,000 range may become a downside support level. If the price bounces strongly from the support area, it will indicate the formation of higher lows. This would increase the prospects of a rebound to $72,000. Buyers are expected to face significant resistance in the $72,000 to $73,777 range.
After the breakthrough, the bullish momentum will weaken, and if it closes below $65,000, Bitcoin could fall to the 50-day moving average support level of $62,117.
