The USD/ILS is near the 3.14050 mark as of this writing, but conditions are somewhat turbulent in the currency pair and traders should compare the written value to current ratios as they monitor the marketplace. While the USD/ILS is correlated to a sudden burst of power in the USD in the broad Forex market which has developed the past few days, the prospect of war with Iran is also shadowing financial institutions certainly.
The U.S buildup of military hardware has reached a critical mass and rumors are making noise in the Middle East as citizens of the nations in the region brace for the potential of escalation. The USD/ILS would certainly endure nervous trading upon a hot conflict in the Middle East, this because Israel would likely become a participant in military actions. Financial institutions and abroad that deal with the USD/ILS have a lot of experience trading during heightened anxiety, but that doesn’t make them immune to being reactive.
Higher Terrain Explored This Morning
On Wednesday of last week the USD/ILS touched the 3.05100 vicinity, but since then has incrementally marched higher. Trading on Monday of this week went back above the 3.10000 level and over the past couple of days seemed to act as support with a few outlier lower also being seen. However, at mid-day yesterday the USD/ISL started show an ability to target and sustain values above the 3.12000 mark. Late last night and again this morning have heard more noise about the Iranian situation adding to nervousness.
And this is where day traders need to be careful. They should not bet blindly on upside, and they should question where resistance will become strong even if the Middle East finds itself engulfed in conflict. Also there is the risky prospect of trying to time military steps and a fundamental lack of knowledge regarding the intentions of the U.S which is a serious guessing game. In other words, betting on the USD/ILS because of the potential of louder news developing carries enormous risks.
Quiet and The Prospect of Noise
Looking for additional upside in the USD/ISL throughout the remainder of the week may feel logical, but it should be done with very solid risk management. Friday is typically a quiet day of trading for the USD/ILS, it may not be tomorrow.
- The Israeli Shekel has been one of the strongest currencies in Forex and it will likely remain this way.
- The prospect of temporary upside may be attractive in the near-term, but if quiet or a resolution is found suddenly, the USD/ILS could react with lower movement.
- It is a game of nerves and day traders participating in the USD/ILS must know wagering on the currency pair in the near-term is not for the inexperienced.
USD/ILS Short Term Outlook:
Current Resistance: 3.14210
Current Support: 3.14110
High Target: 3.19500
Low Target: 3.12100