Over 1% drop for US Dollar vs Israeli Shekel as downside momentum emerges despite bullish trend above key averages

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Us dollar vs shekel slides 1.01% today

Highlights

The Israeli shekel posted a second straight weekly decline against the dollar after the Bank of Israel kept its policy rate at 3.25%.
Central bank communications state that further shekel weakness is adding to inflation, while a stronger currency could aid economic activity.
USD/ILS trades in a bullish technical structure above major moving averages with a projected range of ₪3.0631 to ₪3.1046, and overbought indicators suggest sideways price action near current levels.

Currency depreciation fuels inflation concerns amid policy rate stability

The Israeli shekel recorded a second consecutive weekly decline against the US dollar, following the Bank of Israel's decision to keep its policy rate unchanged at 3.25%. Central bank communications noted that further depreciation in the shekel is contributing to inflation, while a stronger shekel would present an upside risk to economic activity. The current value of the shekel remains much weaker compared to its June levels in 2023.

Anton Kharitonov, expert at Traders Union, believes the recent USD/ILS slide exposes persistent vulnerabilities in the shekel. He notes that while technicals remain bullish, the pair’s heavy reliance on elevated moving averages suggests fragile risk appetite. Central bank reluctance to raise rates may further undermine the shekel’s appeal. Oscillators flag internal weakness, as momentum indicators diverge from price action. "Without new policy support or clear bullish conviction, I see more risk for sudden reversals than sustained upside," he says.

Viktoras Karapetjanc, expert at Traders Union, sees strong opportunities for USD/ILS. He highlights the persistent bullish structure above all major moving averages and notes upside momentum remains dominant. The Bank of Israel’s steady policy stance supports risk-taking and economic flows. He believes further gains are highly probable if resistance at ₪3.1016 breaks. "With constructive fundamentals and momentum, this market still offers attractive setups for buyers," Karapetjanc states.

Sholanke Dele, market strategist, points out negative sentiment surrounding the shekel after back-to-back weekly declines. He stresses that central bank inaction and inflation risks weigh on investor confidence. Weak trend signals and oscillators in overbought territory highlight market instability. "The downside threat may be underestimated as pressure builds and short-term sentiment deteriorates," he warns.

Mixed momentum signals amid bullish structure and key resistance levels

USD/ILS is trading above its 20-day, 50-day, and 200-day moving averages (₪3.0789, ₪3.0485, ₪3.0138), signaling a bullish trend across short, medium, and long-term timeframes. Key levels are marked by a near-term resistance at ₪3.1016 and important support at ₪3.0816, with longer-term momentum confirmed by the bullish alignment of the 50-day and 200-day averages and Ichimoku Kijun support at ₪3.0561. Momentum signals are mixed: MACD and RSI indicate ongoing buyer activity, but ADX reflects a weak trend and Stochastic RSI points to strong sell pressure near overbought territory. CCI is also in overbought territory, BBP above zero denotes intraday buyer dominance, and the Awesome Oscillator is neutral. The pair recently fell to ₪3.0838 as intraday volatility reached 0.70% and early trading pressure persisted, demonstrating divergence between upward momentum indicators and short-term oscillator weakness.

Earlier, analysts noted that Israeli assets including the shekel had displayed resilience despite prolonged geopolitical risks, with market attention focused on political developments for future direction. The latest technical evidence of persistent USD/ILS bullish alignment introduces a stronger upside bias for the currency pair, making a sustained break above ₪3.1016 an important inflection point in the coming sessions.

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

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