The USD/ILS has moved higher in early trading this morning, possibly as a reaction due to President Trump’s tariff sanctioned announced late last night, the currency pair is near 3.71700 now.
After falling to a low of nearly 3.66250 late last week and showing signs of being able to climb down from its highs around 3.71600 on the 26th of March, the USD/ILS has move upwards again and is flirting with near-term resistance levels. President Trump yesterday included Israel on the list of nations that will face sanctions, but the 10% penalty was small compared to many other nations.
The move higher in the USD/ILS may be under the influence of some nervous trading due to financial institutions attempting to price in in risk premium, but there is likely more to the price action upwards than the tariff news. Israeli remains mired in a state of open bickering between government officials and their political detractors. The lack of an efficient government is probably part of the weakness the Israeli Shekel has produced since early March.
Incremental Steps Higher and Flirting with Resistance
The return to values above the 3.70000 level is not outlandish. The price velocity upwards has not been violent. However the incremental steps higher since the 3rd of March, while being choppy, have produced a rather clear technical trend. The ability of the USD/ILS to flirt with highs this morning should be treated with caution by day traders who think the currency pair is now in overbought territory. The broad Forex market globally has been haphazard early today and correlations are not always evident.
As the Trump tariff saga is digested by financial institutions major currencies will react to the coming rhetoric and actions not only from the U.S, but also react to national pronouncements made by politicians worldwide who face tough decisions domestically regarding economics. The U.S is asking nations to rescind their levies against American goods, in order to have tariffs nations face lowered. The USD/ILS however doesn’t face a significant penalty and additional behavioral sentiment from elsewhere may actually be the driver that is also motivating short-term buying.
U.S Jobs Data and Looking Elsewhere for Impetus
Traders need to be prepared for wider than normal spreads in bids and asks today and likely going into tomorrow’s trading, this as banks create a safety net to guard themselves against sudden fluctuations. Speculators of the USD/ILS need to understand the currency pair doesn’t have a lot of volume and it might be best to use entry price orders near-term.
If the USD/ILS sustains prices above the 3.71500 level today this may show that financial institutions are nervous about their outlooks.
While U.S jobs numbers will be published tomorrow, these results will not significantly alter the sentiment in the broad Forex market tomorrow.
Large players in Forex remain focused on the implications of tariffs and their potential affects on risk adverse decisions.
USD/ILS Short Term Outlook:
Current Resistance: 3.71950
Current Support: 3.71680
High Target: 3.72500
Low Target: 3.70700
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