On Thursday (May 22), the dollar index breathed at 99.56, while gold rose to $3324, with increased safe-haven buying in the Middle East as Israel stated it would strike Iranian nuclear facilities swiftly if U.S.-Iran negotiations break down. Bitcoin surged to a new high of $110,000, and the Texas House officially passed the strategic Bitcoin reserve bill SB21.

Israel threatens to strike Iranian nuclear facilities as alarms sound in central regions.

Axios quoted two Israeli sources stating that if negotiations between the U.S. and Iran regarding the Iranian nuclear program break down, Israel is prepared to strike Iran swiftly.

A source referred to Israeli Prime Minister Benjamin Netanyahu by his nickname, stating, 'Israeli President Netanyahu is waiting for the nuclear negotiations to break down, and Trump would be disappointed by the negotiations at this moment and would be willing to grant him approval.'

According to sources, Israeli intelligence previously believed the negotiations were close to an agreement, but now they believe the talks may soon break down.

One source stated that the military believes the window to attack Iran may soon close, and if negotiations do not progress, Israel must act swiftly. However, the Israeli Defense Forces did not explain why they hold this belief.

The news website also reported that two sources confirmed CNN's report that Israel is preparing for a potential attack on Iranian nuclear facilities, adding that any attack would require a week of preparation, rather than a one-time action.

A source stated, 'Israel has conducted extensive training, and the U.S. military sees everything and knows Israel is preparing.'

The Israeli military stated that a missile launched from Yemen towards Israel has been detected, and the air defense system is intercepting it. The ballistic missile attack has triggered alarms in large areas of central Israel.

Texas passes Bitcoin strategic reserve bill; Trump's crypto plan achieved.

According to Watcher.Guru, the Texas House has officially passed the strategic Bitcoin reserve bill SB21. This is a landmark achievement for the cryptocurrency industry. In fact, if the state's governor Greg Abbott signs SB 21, the U.S. will officially establish Bitcoin reserves.

The bill passed on Wednesday with a vote of 101 in favor and 42 against, just one step away from becoming state law. Specifically, the bill will be sent to Abbott, who will decide whether to sign or veto it. If the bill is passed, Texas will join Arizona and New Hampshire as one of the few states with laws allowing for the establishment of strategic Bitcoin reserves.

The bill was drafted by Texas State Senator Charles Schwertner. Additionally, the bill will officially establish Bitcoin reserves in the state, managed by its auditor. If signed into law by the state's governor, the bill will authorize investments in any cryptocurrency with a market capitalization exceeding $500 billion over the past 12 months.

These requirements mean that currently, Bitcoin is the only cryptocurrency that can be invested in Texas. This move represents another shift in U.S. support for cryptocurrency. Previously, President Trump had decided to establish a similar reserve at the federal level. Additionally, it is expected that other states will follow this landmark decision.

Trump's bill vote is imminent, and the likelihood of a Fed rate cut in June is low.

Republican Congressman Chip Roy stated that he will still vote against Trump's tax bill. Despite House Speaker Mike Johnson's efforts to secure a $40,000 SALT deduction cap agreement, he remains opposed. According to Bloomberg, Johnson also confirmed that the tax bill will be submitted for a vote in the House.

Weekly mortgage applications decreased by -5.1% compared to the previous week, which increased by 1.1%. Around 16:15 GMT, Richmond Federal Reserve President Thomas Barkin will speak and may comment on the market. Barkin stated earlier this week that the economic situation and U.S. data stabilization could take several months, potentially not until summer. Federal Reserve Governor Michelle Bowman will also attend this event.

European and U.S. stock markets will remain below zero this Wednesday, with bad luck. The U.S. stock market is currently down between 0.50% and 1.00%.

The Federal Reserve's CME FedWatch Tool indicates that the likelihood of a rate cut at the June meeting is only 5.4%. The minutes from the July 30 meeting show that the likelihood of rates being below the current level is 26.9%. Recent hawkish statements from Fed officials have reduced the likelihood of a rate cut in the near term.

The yield on the U.S. 10-year Treasury bond is currently around 4.53%, having significantly declined from a sharp rise on Monday.

Dollar Technical Analysis

FXStreet analyst Filip Lagaart stated that the dollar index is under pressure and the outlook is starting to look bleak. In Wednesday's early trading, the dollar index continued to decline, falling below the 100.00 mark, having previously closed below a significant bottom of 100.22 the day before, which could lead to a significant drop in the index.

Recent geopolitical news has traders increasingly convinced that President Trump may face significant setbacks during his term and policy implementation. On the upside, the breakout rising trend line and the 100.22 level supporting the dollar index in September-October is the first resistance area. Further upward, 101.90 again becomes the next important resistance level as it has acted as a key level since December 2023 and becomes the base for an inverse head and shoulders (H&S) pattern in the summer of 2024.

The 55-day Simple Moving Average (SMA) at 101.94 reinforces the strong resistance in this area. If dollar bulls push the dollar index further up, the key level of 103.18 will come into play. If downward pressure continues, gold prices could plummet to the yearly low of 97.91 and the key level of 97.73.

Further decline, with relatively weak technical support at 96.94, after which we will look towards the lower levels of this new price range. These two levels are 95.25 and 94.56, which means new lows will be set since 2022.

Gold Technical Analysis

FXEmpire analyst Bruce Powers stated that gold prices continue to rise, reaching a high of $3321, successfully recovering the 20-day moving average. This reflects a rebound in demand, increasing the likelihood that gold prices will reach the next upward target area of around $3370 to $3375. This price area includes the 78.6% Fibonacci retracement level and the intersection of two trend lines.

If it reaches this area, gold prices will complete the test of the trend line of the defined small descending channel's dynamic resistance level. The lower end of this channel recently successfully tested the support level, followed by a bullish reversal. Once the price reverses from one side of the pattern, it is likely to ultimately touch the other side or close before the reversal ends.

In addition, if gold prices continue to rise and break above $3375, it will signal a breakthrough of the current corrective trend line and the upper boundary of the long-term rising trend channel (blue). On April 11, gold prices broke through this channel but then showed signs of failure in the current bearish correction, falling back into the channel range. If gold prices rise above $3375, it will bring gold back above the channel's upper line and issue a second bullish channel breakout signal.

Previously, gold prices had also formed a bullish channel marked by a purple trend line, initially triggered on March 31. Although this breakout was unsuccessful, it broke higher again on April 10 with greater success, setting a new high of $3500 later that month. Additionally, recent pullbacks successfully tested the support level near this channel. Once previous resistance is tested as support and subsequently strengthens, it constitutes a bullish signal.

The weekly bullish reversal triggered this week is also favorable. This reversal has been confirmed on the daily chart; if this week's gold closing price can break above last week's high of $3292, then the weekly chart of gold will also be confirmed at a higher timeframe. Additionally, the highest weekly closing price for gold was $3327.

If gold prices can maintain strength on Friday, they are expected to set the highest weekly closing price. Finally, the monthly pattern of gold is currently an inside month pattern, which may also end this month in an inside month pattern. The highest price so far in May is $3439, and the lowest is $3121.

Bitcoin Technical Analysis

CoinTelegraph noted that the latest recovery of Bitcoin has sparked optimism among market analysts and traders, who expect Bitcoin to reach an all-time high.

Renowned analyst AlphaBTC stated in a post on Wednesday that Bitcoin will reach an all-time high. The attached chart shows that since the recovery began on April 9, Bitcoin prices have been trading within an extended rising parallel channel.

MN Capital founder Michael van de Poppe stated, 'Bitcoin will reach an all-time high faster than I expected.'

According to him, Bitcoin prices could rise to $200,000, 'as more and more people are tired of the continuous devaluation of the dollar.'

Analyst Mags stated that Bitcoin prices are entering 'the largest bull market ever', with the highest price expected to reach around $215,000 based on Bitcoin's four-year halving cycle.