- The US dollar has rallied slightly during the trading session on Thursday against the Israeli shekel, as the overall action over the last couple of months have suggested a bit of a “bullish flag” setting up.
- Granted, this takes a little bit of artistic license to see it, but you can clearly see how we had shot higher, only to pull back and then find a bit of support.
What also makes it interesting is that it occurred and the 200-Day EMA, and the 50-Day EMA as well. All things being equal, that should attract a certain amount of technical trading, and therefore one has to pay close attention to it. The other thing to pay close attention to is the fact that we are struggling with the 3.75 ILS level, which has been important a couple of times in the past. If we can break above there, then it’s likely that the market could go looking to reach the recent swing high, near the 3.85 ILS level.
Buying On the Dips
The US dollar is certainly going to be favored in the environment right now, due to the fact that there are so many geopolitical issues out there that continue to move currencies, most specifically the US dollar. The fact that one of the biggest areas of geopolitical concern is literally the Israeli area itself, this cannot be forgotten as well. Quite frankly, in a situation where interest rates continue to rise in the United States, or at the very least are going to stay higher for longer, it does make a certain amount of sense that the US dollar will be a winner.
Underneath, the 3.70 ILS area offers a significant amount of support, as it should have quite a bit of “market memory” built into it, as the area previously had been a significant amount of resistance just for 5 weeks ago. In general, this is a market that looks like it is entering a set up to the upside, but it should also be noted that this pair is typically very choppy, so I do think at this point in time it’s probably best to temper your expectations of huge moves but recognize that this is relatively positive at the moment.
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