As of this writing the USD/ILS is traversing around the 3.90000 ratio, this as financial institutions continue to pursue lower price action in the currency pair. The Israeli Shekel is trading within values last seen in 1993. The USD/ILS bearish trend has been on attack for over two and a half years, but the lower price action the past few days has added additional velocity as new depths have become sustained.
There are loud voices coming from Israeli businesses for the Central Bank of Israel to cut interest rates. Currently the central bank has its borrowing cost at 4%. However, while start-up businesses which have to pay salaries to developers escalates because of the strengthening Shekel, particularly if USD must be converted into the ILS, the Central Bank of Israel and politicians remain cautious regarding actions.
Waving Goodbye to the 3.00000 Level
The last time the USD/ILS traded above the 3.0000 level was the end of April. Since last week the USD/ILS has traversed downwards incrementally. The belief that the Iranian war ceasefire is holding is certainly adding to the positive impetus regarding the strength of the Israeli Shekel. Yet, the bearish trajectory downwards has been demonstrated in an adamant fashion over the long haul, so this isn’t the only reason for the momentum lower.
Day traders with the notion to remain sellers of the USD/ILS cannot be faulted. The once important psychological barrier of 3.00000 which some speculators may have believed was a target that was impossible only a handful of months ago has been proven vulnerable. Using technical charts to try and gauge what is next regarding lower price action potentially, should likely be done using measured incremental steps.
New Lows and Betting on Price Swings in the USD/ILS
For the time being it appears the USD/ILS has the ability to move lower still. The past couple of days which produced velocity downwards has been noteworthy.
Traders should probably not be betting on such swift occurrences to happen again over the near-term, but the movement lower has been unquestionably strong.
Looking for solid targets below that are realistic while not overreaching – which could lead to potential intraday volatility knocking a trader out of positions when reversals happen – is an important tactic to consider.
Israeli financial institutions seem to think the USD/ILS can traverse lower, but they also understand the complications which will develop if the Shekel becomes too strong.
Meaning at some point the USD/ILS may run into some support because thinking become cautious regarding the ability of the currency pair to plow lower unimpeded.
USD/ILS Short Term Outlook:
Current Resistance: 2.90300
Current Support: 2.89800
High Target: 2.92100
Low Target: 2.88600