The USD/ILS has tracked lower the past day and a half and has started trading this morning continuing to test lower values while important mid-term support lurks.
- The USD/ILS has traded lower and is touching values last seen in early April. Having begun the week testing prices above the 3.73470, the USD/ILS has correlated to the broad Forex market well.
- Also early this week in Israel a holiday was being observed which cut down dramatically on volume. However late on Tuesday and yesterday the USD/ILS began to see solid selling.
- The lows achieved yesterday occurred after the Consumer Price Index numbers from the U.S came in below expectations.
As of this moment the USD/ILS is trading near the 3.66935 ratio which was last seen in a sustained manner the last week of March and first days of April. The ability of the USD/ILS to trade lower and maintain the stance near important mid-term support levels is important. Economic and political conditions in Israel remain turbulent, but financial institutions that deal in the USD/ILS are experienced in these conditions and the correlation to the broad Forex market needs to be highlighted.
Weaker USD Outlook and Near-Term Considerations
Not only was the CPI data weaker yesterday from the U.S, but so were Retail Sales and the Empire State Manufacturing Index. These economic results will help fuel expectations among financial institutions that Federal Reserve outlooks should consider the potential of Federal Funds Rate cuts potentially in the summer. While that outlook may be too optimistic, recent slowing within the growth numbers via the GDP and yesterday’s inflation reports will help build momentum possible in the minds of sellers of the USD.
The USD/ILS support level near the 3.60000 mark may become the target for USD/ILS bearish perspectives. However, short-term day traders need to be more cautious and not become too ambitious. Looking for more bearish tendencies in the USD/ILS remains logical but risk taking tactics must be used carefully. The cashing in of profits is advised for short-term traders before reversals suddenly emerge.
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USD/ILS the Next Couple of Days
The U.S will release weekly unemployment figures today, but the data is unlikely to cause a storm in Forex or for the USD/ILS. Traders will look at technical ratios in the currency pair and monitor the yields on U.S Treasuries, which may remain under some pressure. The USD/ILS may present an opportunity for traders looking for downside if they use slight reversals higher to potentially initiate their selling wagers.
- If resistance around the 3.67400 to 3.68100 level hold their ground and prove durable in early trading today, this could create additional belief the USD/ILS could test the 1.66500 to 1.65000 levels below.
- Traders should keep in mind trading volumes drop off on Friday’s in the USD/ILS because of the Israeli weekend, which opens the door to volatility on occasion before the day ends.
USD/ILS Short Term Outlook:
Current Resistance: 3.67350
Current Support: 3.66600
High Target: 3.69200
Low Target: 3.64910
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