FxNews – In today’s comprehensive USDILS forecast, we will scrutinize Israel’s current economic conditions. Then, we will meticulously delve into the details of the technical analysis for the USDILS pair.
Analyzing Shekel Amidst Current Events
Bloomberg—In the latter part of October, the Israeli Shekel managed to arrest its fall, marginally reaching 4.05 per USD after reaching 4.08 per USD. This occurred amidst the backdrop of Israel intensifying its ground operations in Gaza. Despite Prime Minister Netanyahu’s warning of a protracted war, fears of the conflict escalating regionally seemed to have temporarily subsided.
Simultaneously, the central bank took unprecedented action by selling up to $30 billion of foreign currency in the open market. This marked the first instance of such a sale of foreign exchange, which contributed to the stabilization of the currency. However, the Shekel has continued to hover near lows unseen since 2015. It is projected to close in October with a decline of about 6.3%, primarily attributed to the war in the Gaza Strip.
Before the Hamas attack on October 7th, the Shekel was already experiencing downward pressure. This was due to Prime Minister Netanyahu’s impending actions to weaken the country’s judiciary system despite protests earlier in the year.
Economic Implications
While the central bank’s intervention helped stabilize the Shekel, the ongoing conflict and political instability could harm the economy in the long run. The currency’s depreciation, if sustained, could lead to inflation and economic uncertainty. Therefore, while the short-term stabilization might seem optimistic, the overall situation could harm the economy.
USDILS Forecast and Technical Analysis
The USDILS currency pair (US Dollar and the Israel Shekel ILS) has significantly declined, reaching the 50% level of the Fibonacci retracement. The Israeli Shekel is currently testing the Ichimoku cloud, while the RSI indicator is nearing the oversold area. It’s important to note that the ongoing military operation and conflict in Gaza have made this currency pair highly unstable and unpredictable. Our thoughts are with the people of Israel who have lost loved ones during the ongoing conflict with Hamas.
For a more detailed outlook on the USDILS price action, we delve into the 4-hour chart. The bears have aggressively bet on the Israeli Shekel, leading the RSI indicator to hover in the oversold area for a week now. Given the pair’s extremely oversold status, we advise against bidding on buying now.
Analysts at FxNews suggest waiting for the USDILS price to correct. If the price can break out of the bearish channel in the 4-hour chart, it’s likely to rise and test the pivot. The pivot could provide a decent demand zone for the bears to add further pressure.
We recommend closely monitoring these levels and looking for candlestick patterns such as doji, bearish engulfing, or long-wick candlestick patterns before initiating a trade.
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.
