Middle East conflict and safe-haven flows: US Dollar vs Israeli Shekel gains 0.84%

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US Dollar vs Israeli Shekel up 0.84%

Highlights

Escalating conflict between the U.S., Israel, and Iran triggered U.S. military strikes in Tehran and threats to Gulf infrastructure.
The U.S. Dollar strengthened as a safe-haven currency, driving increased volatility across major forex markets.
USD/ILS shows short-term bullish momentum but faces capped rallies, with expected range at ₪3.135–₪3.165 and downside risks prevailing.

Safe-haven flows drive dollar gains amid Middle East escalation

On March 21, 2026, heightened geopolitical tensions emerged as the U.S. and Israel engaged in direct conflict with Iran, including U.S. military strikes in Tehran and warnings from Iran to target Gulf infrastructure if attacks continue. As of March 22, 2026, U.S. Treasury Secretary Scott Bessent confirmed the government's request for supplemental military funding from Congress to maintain military supply levels, stating the U.S. has ample fiscal resources for current war needs. The U.S. Dollar has gained as a safe-haven currency in the wake of crisis escalation in the Middle East, contributing to increased volatility in major forex pairs.

Buyer strength persists as technical support holds and momentum builds

Technical analysis shows USD/ILS above the Ichimoku Kijun support level at ₪3.1095, underlining continued buying interest close to immediate support. Momentum signals such as MACD and ADX point to moderate, building upward force, while intraday RSI (54.5) and CCI (54.8) remain constructive without overbought conditions. BBP underscores strong buyer dominance, while the Awesome Oscillator offers a neutral trend signal. The session opened with a gap higher and remains near the top of today's range (₪3.1320–₪3.1413), reflecting ongoing follow-through strength, though resistance looms on longer timeframes.

Range-bound outlook dominates as upside risk limited by resistance

Over the coming week, USD/ILS is expected to trade within a typical volatility band of ₪3.135 to ₪3.165. The probability of further gains is low (less than 20%), with the baseline scenario pointing to sideways movement within the established range. A breakout above resistance at ₪3.165 could trigger short-term upward momentum, while a drop below immediate support at ₪3.135 would expose the pair to renewed downward pressure. Most weekly trend indicators remain negative, suggesting rallies are likely to be capped.

Viktoras Karapetjanc, expert at Traders Union, sees a constructive bias for USD/ILS as safe-haven flows and geopolitical tensions drive the pair above short- and medium-term moving averages. The macro backdrop continues to favor the US Dollar after the conflict escalation, while technical momentum is present but capped by longer-term resistance. This analyst believes a breakout above ₪3.165 could attract fresh buying, though the wider trend remains cautious. "Momentum is building, but confirmation above key resistance is needed before I expect further upside in USD/ILS."

Earlier, analysts noted that USD/ILS was experiencing short- and medium-term bullish momentum, yet remained constrained by underlying long-term bearish pressures. The current surge driven by geopolitical escalation reinforces this dynamic, but with weekly trend signals still negative, traders should remain alert to potential sharp reversals if immediate support at ₪3.135 fails.

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.