The price of the USD/ILS is currently below the 3.50000 value and this may catch some day traders by surprise, particularly if they thought a spike higher in the Israeli Shekel would see sustained momentum.
If an unknowing trader were to look at the price of the USD/ILS and see that current value for the currency pair is around the 3.49900 mark, they might believe there is nothing of interest going on in the Middle East. However, a trader who is paying attention to the current war between Iran and Israel may believe current price action is in fact rather boring. The USD/ILS did climb to a high of nearly 3.68230 on the 13th of Friday, but its reversal lower since seeing these temporary apex ratios has been quite impressive.
In essence the USD/ILS continues to show a legitimate bearish trend and is once again showing that financial institutions are calm and may actually believe the mid-term outlook for the currency pair remains downwards. The Israeli Shekel has had a considerable headwind to fight over the past year and a half, but it has continued to show via the USD/ILS that it should not wagered on simply because of a belief nervous sentiment will take the currency pair higher.
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The 3.50000 Level and Behavioral Sentiment
The ability of the USD/ILS to move below the 3.50000 again and show lower price action in the face of the current war situation is rather remarkable. Short-term players in the USD/ILS certainly still need risk management at all times. There is a definite threat that something bad could happen in the Middle East that would shake financial institutions confidence. However, the resilience of the Israeli Shekel and its correlation to the broad Forex market and a weaker USD cannot be dismissed.
Certainly traders will continue to watch what is happening between the U.S and Iran on a minute to minute basis, but the USD/ILS is showing behavioral sentiment remains confident via a solid outlook. The U.S Fed will release its FOMC Statement later today, the Fed will not lower interest rates today. But if the Fed suggests it could lower the Federal Funds Rate in the coming months, this may play into more downside for the USD/ILS.
Fear of Support and Reversals Higher in the USD/ILS
The USD/ILS on Monday was able to challenge the 3.47000 ratio which was a feat considering that on Friday that Israel and Iran went into a full scale war scenario.
- The 3.47000 level is seen as support in the USD/ILS, and on the 5th of June the level was tested too.
- Which brings up the point that while the USD/ILS has shown a strong bearish tendency, it has also shown that support remains relatively active and may need additional impetus to march lower.
- Meaning short-term traders should consider using reversals higher that are technically perceived to look for lower movement while not getting over confident.
USD/ILS Short Term Outlook:
Current Resistance: 3.50200
Current Support: 3.49500
High Target: 3.52900
Low Target: 3.48100
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