The USD/ILS is within depths not seen since October of 1993, this as it traverses near the 2.82520 ratio as of this writing. An interest rate cut of 0.25% was enacted by the Bank of Israel a couple of days ago.
Having proven over the past handful of weeks the strength of the Shekel, and waving goodbye to the 3.00000 level on the 30th of April, the USD/ILS is now traversing near the 2.82520 ratio depending on the bids and asks. The Israeli Shekel continues to show it is one of the strongest currencies worldwide. The USD/ILS is not a big volume Forex pair, so speculators who are stumbling onto the currency pair as an attractive wager need to study up before they start gambling.
The USD/ILS had been challenging the 2.90000 level since the end of the first week in May and continued to show sustained value. Resistance levels though certainly tested upwards have demonstrated an incrementally declining base above. The Bank of Israel cut its key lending rate from 4.00% to 3.75% a couple of days ago. And instead of losing value, the Israeli Shekel actually gained more value abruptly.
Source of Pride for Some and Angst for Others
While the Bank of Israel Governor has spoken in glowing terms regarding the strength of the Israeli Shekel, he also admitted that the USD/ILS Forex rate is causing some pain for exporters. However, he also pointed out that exporters continue to create growing business. The Bank of Israel cut the interest rate of the Israeli Shekel, but some financial institutions had been hoping for a more aggressive cut.
Thus, the USD/ILS has shown additional bearish trajectory likely based on financial institutions believing the Israeli economy is strong, but also showing that an interest rate of 3.75% is still considered high. The USD/ILS is swimming within depths it has not seen since October of 1993. The trend lower in the USD/ILS which has been demonstrated the past couple of years doesn’t appear ready to end quite yet.
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Speculative Betting on the USD/ILS Trajectory
The ability of the USD/ILS to continue its lower path and actually pick up power in recent days shows that financial institutions are active and view the Israeli Shekel in positive tones. Day traders who are contrarian and want to bet against the trend may be betting against the wrong horse.
Yes, reversals higher certainly occur and Israel remains within a geographical location that remains full of noise militarily and can have sudden surprises.
However, the USD/ILS has continued to trend lower and betting on a sudden reversal of sentiment may prove costly for speculators.
Again, the USD/ILS is not a highly traded currency pair, entry price orders are highly recommended.
And traders should not get overly ambitious and instead be willing to cash out profits when they arise with quick hitting targets.
USD/ILS Short Term Outlook:
Current Resistance: 2.82750
Current Support: 2.82300
High Target: 2.84200
Low Target: 2.80700
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