The USD/ILS is near the 1.33600 mark as of this writing, showing a rather incremental downwards trend as the day has begun, but that is not the whole story as speculators know.
The USD/ILS was trading rather comfortably near lows yesterday around the 3.33900 level when news regarding an Israel strike on alleged Hamas headquarters in Qatar yesterday. The USD/ILS start to move higher as news of the military action grew and a mark of 3.35700 was momentarily challenged. As of writing almost 20 hours later the USD/ILS has moved back down to nearly 3.33600. Remarkably the USD/ILS has kept it known price range tranquilly.
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While financial institutions reacted to yesterday’s breaking news with a sudden spurt of buying in the USD/ILS, the price action cannot be described as extraordinary. In fact what might be the main story regarding the trading of the USD/ILS is actually how calm the day passed for financial institutions. Experienced large players of the USD/ILS are rather accustomed to sudden storms.
The Ability to Stay Calm in the USD/ILS
Over the past handful of days the USD/ILS has essentially moved lower again. The currency pair is lower when a one week perspective is considered. The USD/ILS is still trading above yesterday’s and Monday’s lows, which makes the currency pair rather tempting for speculators who have some patience if they are willing to bet on a reaction via the U.S inflation numbers later today.
In essence the loud noise from the Middle East yesterday has been brushed to the side by USD/ILS traders and they are now focused on today’s U.S Producer Price Index report. The USD/ILS has been correlating to the broad Forex market rather well and it remains within the lowest part of its long-term range.
Inflation Reports and Near-Term Trading
There will definitely be noise and accusations within the Middle East regarding Israel’s military action in Qatar against Hamas. However, experienced financial institutions understand this and are much more focused on the outlook of the U.S Federal Reserve.
- If today and tomorrow’s U.S inflation data comes in tame – meeting expectations or with lower than anticipated results the USD/ILS could see selling emerge and a retest of lows.
- If the PPI and CPI statistics today and tomorrow prove problematic and produce higher than expected inflation the USD/ILS could see buying emerge.
- Short-term reactions later today will take place in the USD/ILS and the price action is likely going to correlate with the broad Forex market.
- Day traders should not get overly ambitious, but the USD/ILS could challenge the 3.32000 vicinity and below if the PPI report meets expectations or is slightly weaker.
USD/ILS Short Term Outlook:
Current Resistance: 3.33800
Current Support: 3.33200
High Target: 3.34900
Low Target: 3.31700
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