US Dollar vs Israeli Shekel slides slightly after institutional hedging by Israeli investors

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US Dollar vs Israeli Shekel down 0.52%

Highlights

The Bank of Israel intervened by purchasing over $1 billion of USD in June to stabilize the shekel and support orderly FX trading.
Ongoing shekel weakness is driven by institutional hedging activity and heightened regional tensions that are fueling risk aversion and demand for dollars.
USD/ILS trades below key moving averages with bearish momentum, and is projected to range between ₪2.9839 and ₪3.0157 over the next few days.

Shekel under pressure as central bank acts and geopolitical risks rise

The Bank of Israel has intervened in the foreign exchange market for two consecutive months, purchasing over $1 billion in June and about $800 million in the prior month to maintain orderly trading conditions, according to Globes Co. These substantial operations introduce significant USD liquidity and reflect ongoing efforts to address persistent market imbalances. Further downward pressure on the shekel stems from institutional investors' hedging activity, while renewed Middle East tensions have contributed to increased risk aversion and demand for foreign currency.

Bearish momentum prevails as USD/ILS tests major technical barriers

USD/ILS remains under key technical levels, with the price situated below the MA-20 at ₪3.0124, the MA-50 at ₪3.0276, and the longer-term MA-200 at ₪3.0628. The Ichimoku Kijun line currently stands at ₪3.0213, marking immediate resistance. On the indicator side, both the Moving Average Convergence Divergence (MACD) and Average Directional Index (ADX) continue to point to sustained bearish momentum, while the Relative Strength Index (RSI) at 33.67 signals a Sell. Bull/Bear Power and Commodity Channel Index (CCI) also confirm intraday seller dominance, with Stochastic RSI and CCI in oversold territory. The Awesome Oscillator is neutral, offering no additional directional bias.

Downside risk dominates as price holds below resistance zone

Over the next two to three trading days, USD/ILS is expected to fluctuate within a typical volatility band between ₪2.9839 and ₪3.0157. The probability of a downward move remains very high, while an upward reversal is viewed as much less likely. Price action should remain broadly range-bound unless a decisive break above immediate resistance at ₪3.0213 or below support near ₪2.9839 occurs.

Viktoras Karapetjanc, expert at Traders Union, sees the shekel under sustained pressure as both institutional hedging and renewed Middle East tensions weigh on sentiment. He believes the Bank of Israel’s interventions highlight ongoing imbalances but have not reversed the bearish momentum. Key technical levels remain intact, pointing to further risks for ILS in the near term. While range trading may persist, downside potential dominates unless resistance at ₪3.0213 is broken decisively. "I remain constructive on USD/ILS, expecting the pair to stay subdued unless we see a marked shift in macro or geopolitical factors."

Earlier, analysts noted that although USD/ILS retained some short- and medium-term bullish momentum, its overall long-term trend remained weak. The latest wave of central bank intervention and deepening bearish technical signals reinforce the downside risk, making a potential breakout below immediate support a crucial scenario to monitor in the days ahead.

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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