The USD/ILS is traversing above the 3.70000 level as of this writing, and its ability to traverse higher is a clear indication that financial institutions are anxious about domestic political issues.
The USD/ILS has seen a clear bullish trend emerge over the past month. The USD/ILS is now trading above the 3.70000 level and showing an ability to sustain higher territory. The move upwards has certainly been sparked by internal domestic political discord, which is making financial institutions nervous, including ratings agencies which monitor the fiscal and economic outlook of Israel.
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From late January until the end of February the USD/ILS had been challenging support ratios near the 3.54000 level with some consistency. The USD/ILS performed extremely well via bearish perspectives from November until late this February. However the USD/ILS has now lost value and financial institutions which were feeling optimistic about outlooks, have now grown concerned about a lack of political cohesion in Israel, which is also making Israeli equities perform nervously.
Risk Premium Discounting Has Come to an End
The USD/ILS saw plenty of bearish selling from November into late February based on the notion risk premium which had been factored into the Israeli Shekel since October of 2023 could be discounted. Optimism that the conflict in the Middle East had quieted still in fact may exist in the minds of many financial institutions dealing with the USD/ILS, but it is loud political debate regarding domestic governance which is now causing harm.
No, the move higher in the USD/ILS has not been violent. The price range of the USD/ILS is known, but certainly speculators can clearly see that the past handful of days has produced a wider range. On Tuesday of this week the USD/ILS did turn in downward momentum rapidly which produced a test of the 3.64000 vicinity. So traders should not listen to fear mongering regarding the current bullish trend which has been seen in recent weeks. Yet, they should pay attention to behavioral sentiment which is anxious.
Near-Term Speculation in Question for USD/ILS
While the USD/ILS may look overbought to some speculators, as the end of the week approaches for the currency pair traders will need to remain cautious. The 3.70000 level is important and if values sustain over this price, speculators may believe financial institutions may be about to retest a higher range where 3.71000 to 3.75000 get tested.
- A high of nearly 3.74000 was flirted with by the USD/ILS on early Monday this week.
- However, if the USD/ILS can produce values below the 3.70000 mark today and tomorrow, it may signal financial institutions believe too much nervousness has been expressed and the currency pair can once again test the 3.68000 to 3.65000 marks.
- The USD/ILS remains a speculatively intriguing currency pair because of its rather well practiced price levels and the notion that behavioral sentiment is a key factor in its trading.
USD/ILS Short Term Outlook:
Current Resistance: 3.70800
Current Support: 3.69800
High Target: 3.73100
Low Target: 3.66500
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