Stable session for US Dollar vs Israeli Shekel as ₪2.9069 support level holds

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US Dollar vs Israeli Shekel drops 0.53%

Highlights

US Treasury's plan to use Iranian funds to compensate Gulf allies after recent US-Israeli strikes has heightened regional tensions and market uncertainty.
Increased geopolitical risk is intensifying volatility for the Israeli Shekel, with further uncertainty due to policy moves on West Bank settlements.
USD/ILS remains under broad selling pressure, with a high probability of trading within ₪2.9069–2.9409 and bearish technical momentum prevailing.

Geopolitical tensions and policy shifts drive shekel volatility risk

US Treasury Secretary Scott Bessent’s announcement of a commitment to use Iranian funds to compensate Gulf allies for damage, following recent US and Israeli strikes on Iran, has increased regional tension and affected key energy supply chains. These developments introduce added uncertainty for markets exposed to the Israeli Shekel, amplifying risk sentiment and potential volatility. Secondary policy activity, such as upcoming funding allocations for new settlements in the West Bank, has added to the overall geopolitical backdrop, though price action has remained under broader selling pressure.

Momentum signals align bearish as key resistance and support hold

USD/ILS is trading below the MA-20 at ₪2.9468 and the MA-50 at ₪2.9605 on the working timeframe, with the long-term MA-200 well above at ₪3.0960. Immediate resistance is defined by the Ichimoku Kijun level at ₪2.9510. Momentum indicators signal prevailing seller dominance: MACD and RSI (43.29, Sell) point to continued downside, CCI, BBP, and Awesome Oscillator reinforce negative momentum, while ADX is neutral, indicating that trend strength is not pronounced. Stoch RSI remains neutral, reflecting a loss of downside momentum, and the pair is trading near session lows with modest volatility observed intraday. Overall, signals are largely aligned to the downside, except for minor neutrality in the Stoch RSI.

Downside bias persists amid low breakout probability and tight range

For the next 2–3 trading days, USD/ILS is expected to remain within a typical volatility band ranging from ₪2.9069 to ₪2.9409. The probability of a move higher is assessed to be very low, while the likelihood of further declines remains high under the current backdrop. The baseline scenario anticipates a sideways trading corridor unless a breakout above immediate resistance takes place. Downside acceleration may occur if the pair decisively falls below the established support boundary.

Anton Kharitonov, analyst at Traders Union, sees USD/ILS dominated by risk-off sentiment as geopolitical tensions and policy actions reinforce market caution. He notes that key technical levels are capping any rebound, with momentum signals clearly favoring sellers. The probability of a meaningful recovery is very low, as downside pressure persists under the current backdrop. "This is not a market for aggressive positioning — as long as USD/ILS remains below resistance at ₪2.9510, the path of least resistance is lower."

Earlier, analysts noted that although USD/ILS had shown short- and medium-term bullish signs, caution was warranted due to mixed technical signals and prevailing overbought conditions. The current setup not only reaffirms that cautious stance but also underscores the heightened downside risk in light of strengthened bearish momentum and escalating regional geopolitical uncertainties; traders should closely monitor for any break below the established support band as it could prompt additional selling pressure.

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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