- The US dollar has bounce slightly against the Israeli Shekel during the trading session on Monday, after falling for quite some time.
- It looks as if we are going to stay in some type of range, which is quite remarkable considering the fact that Israel is in the midst of a major military operation, so it does suggest that perhaps there is going to be a certain amount of resiliency to the Israeli Shekel going forward.
Technical Analysis
The technical analysis for this market is quite simple. The 50-Day moving average EMA and the 200-Day EMA indicators both look relatively flat and are hanging around the 3.70 level. The market is currently trying to get back to that level and it serves as some type of median for trading. However, I would postulate that the market has a much wider range, with the 3.60 level underneath as support and the 3.85 level above has major resistance.
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Keep in mind that the market is likely to continue to be very noisy, and it is very choppy. All things being equal, this is a market that I think you look for value to buy the US dollar, just as you look to sell when the Israeli Shekel gets a little oversold. Ultimately, I think we continue to see this pattern going forward, because we have a relatively tight Federal Reserve, but at the same time we have a very resilient Israel.
With this, I believe that we are closer to the bottom then the top, but it doesn’t necessarily mean that it’s quite time to buy it. On a grade of 1 to 5 stars, I would say that this is about a 3.5 star entry point. I would love to see this pair drop toward the 3.60 level to start buying, but if we were to clear the moving averages, that could open up the possibility of a move to at least the 3.80 level, although it will more likely than not be choppy. It’s a neutral market, but we are getting closer to the bottom of the range than to the top.
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