Can US Treasury yields hitting highest since 2007 trigger USD/ILS?

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US Dollar vs Shekel drops 0.67% today

Highlights

The US dollar weakened as market expectations for further Federal Reserve rate hikes declined on softer US economic data.
Rising US Treasury yields and heightened volatility from Middle East tensions have complicated currency market movements and pressured USD versus the shekel.
USD/ILS trades below key moving averages with mostly bearish momentum signals, an expected range of ₪2.959 to ₪2.9888, and a 73% probability of further downside.

Rate cut expectations and Middle East risks pressure USD/ILS

The US dollar's weakness, as reported by Economictimes Indiatimes, has been primarily driven by a decline in market expectations for further Federal Reserve rate hikes. This sentiment shift followed a series of softer US economic data releases, including slower retail sales and increased job losses, which have collectively underscored a lower interest rate trajectory and diminished demand for USD versus major currencies such as the shekel. Concurrently, rising US Treasury yields, with the 30-year yield reaching levels not seen since 2007, have added complexity to currency markets as higher inflation expectations and ongoing Middle East tensions—particularly involving Iran—fuel volatility. The combination of these factors has contributed to the recent selling pressure observed in USD/ILS.

Bearish momentum persists as intraday buyer interest emerges

On the technical front, USD/ILS is trading below the MA-20 and MA-50 on the H1 chart, and remains under the MA-200 on the daily chart. Immediate resistance stands at the Ichimoku Kijun level of ₪2.986. Momentum indicators confirm the bearish picture, with both ADX and Awesome Oscillator reflecting elevated selling pressure and MACD appearing neutral. RSI, Stoch RSI, and CCI are all in oversold zones, pointing to potential exhaustion among sellers, while Bull/Bear Power highlights some intraday buyer dominance, creating a conflict with generally negative momentum readings.

Sideways trend favored as probability tilts bearish for USD/ILS

In the short term, USD/ILS is expected to trade between ₪2.959 and ₪2.9888 over the next 2–3 sessions, with a 27% probability of an upward move and a 73% probability of a downward move. The baseline outlook is for continued sideways trading within this established range. If the pair breaks above the immediate resistance at ₪2.986, a bullish scenario could develop, whereas a move below ₪2.959 would open the path for further declines.

Anton Kharitonov, analyst at Traders Union, sees USD/ILS locked in a bearish phase as softer US economic data weighs on dollar sentiment. He notes technical pressure, with the pair under key moving averages and momentum largely negative. However, oversold oscillators point to possible seller fatigue amid ongoing volatility. "Until ₪2.986 is reclaimed, my tactical outlook stays defensive — I expect further weakness unless buyers regain control above resistance."

Earlier, analysts noted that USD/ILS was dominated by persistent bearish momentum and seller pressure, suggesting a bias toward further downside. The latest technical and macroeconomic developments reinforce this outlook, with traders advised to closely monitor a potential break below ₪2.959 as a signal for increased downside risk.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.