US Dollar vs Israeli Shekel price prediction: ₪2.86 support holds as USD/ILS trades flat

Traders Union
All News
Financial News
US Dollar vs Israeli Shekel down 0.61%

Highlights

The Bank of Israel cut its policy rate to 3.75% in response to a stronger shekel, subdued inflation, and evolving geopolitical risks.
Policymakers signaled openness to further rate cuts and potential currency intervention amid exporter concerns over shekel appreciation.
USD/ILS trades under key moving averages with bearish momentum, likely to stay between ₪2.8600–₪2.8800 barring a break of immediate support or resistance.

Rate cuts and intervention concerns as shekel strength challenges exporters

The Bank of Israel reduced its policy interest rate to 3.75 percent, marking its second cut this year and reflecting a response to the strengthening shekel, contained inflation, and changing geopolitical outlook. Moderating inflation, which remained at 1.9% in April and within the government's target range, provided additional latitude for the central bank's accommodative actions. Policymakers also indicated openness to further rate reductions and possible foreign exchange intervention should the currency appreciate further, while exporters have expressed concern about competitiveness as a result of the shekel's strength.

Bearish momentum and oversold signals as technical barriers limit recovery

Technically, USD/ILS is trading beneath the SMA-20 at ₪2.9159, the SMA-50 at ₪2.9936, and the SMA-200 at ₪3.1248. The Ichimoku Kijun level on the daily chart is positioned at ₪2.9481, providing immediate resistance. MACD and ADX on the daily format both deliver sell signals, with momentum favoring further downside. RSI remains at 37.6, not yet indicating oversold, while CCI flags deeper oversold readings and Stoch RSI is neutral but close to oversold territory on lower timeframes. BBP is negative, showing seller dominance intraday, and the Awesome Oscillator remains neutral with no meaningful divergence. Price action stays near the day's lows and volatility has been moderate, with indicators confirming persistent bearish momentum.

Range-bound trading as low recovery odds anchor outlook

Looking ahead, the short-term trading outlook for USD/ILS remains within a narrow range between ₪2.8600 and ₪2.8800, reflecting a typical volatility band near recent lows. The likelihood of a price recovery is low, with a less than 20% probability of a meaningful upward move. The base case scenario is for the pair to remain in a sideways channel, with support near ₪2.86 and resistance at the Kijun level of ₪2.95. Any breakout above resistance may initiate a brief bullish move toward the upper range, while a close below support would likely accelerate selling pressure and open the door for fresh declines.

Viktoras Karapetjanc, Traders Union expert, believes recent policy steps by the Bank of Israel reinforce shekel strength and sustain the downward pressure on USD/ILS. He sees contained inflation and further easing signals as positive macro drivers for the shekel, with bearish momentum dominating the technical outlook. A sideways channel remains the base case in the short term, with little near-term recovery expected. 'As long as monetary policy remains supportive and macro conditions favor the shekel, I expect further downside pressure on USD/ILS to persist,' Karapetjanc says.

Earlier, analysts noted that sustained bearish momentum and persistent shekel strength were driving downside pressure in USD/ILS. The current backdrop of additional interest rate cuts by the Bank of Israel, coupled with technical confirmation of continued seller dominance, further entrenches this bias, making any sustained recovery unlikely unless there is a decisive move above the Kijun resistance level.

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.