The shekel is facing an important moment against the dollar. On June 1, the Israeli currency reached its strongest point in 33 years but has since lost half of those gains. The future direction of the shekel may depend on the ongoing conflict involving Iran and its expected economic impact. Initially, the shekel’s rise this year was supported by perceived U. S. involvement, prompting the Bank of Israel to maintain a strict monetary policy to curb inflation.
In May, the Bank of Israel purchased $801 million in foreign currency to help stabilize the strong shekel. The exchange rate for the shekel is typically quoted per dollar, meaning that a lower rate indicates a stronger shekel. The shekel recently hit a low of 2.7978 against the dollar, part of a continued strengthening trend since October 2023. This drop is significant in technical analysis, as it can serve as support or a point for further decline.
After this low, the dollar-shekel rate increased to 2.9876, nearly the midpoint of the earlier decline. A break above this level could push traders to aim for the psychological mark of 3.0. The next target, if the rate continues to rise, is 3.0318, while a drop in the shekel could lead to lower levels at 2.7754 and 2.6990.
Israeli Shekel at a Crossroads: What’s Next After Strong Run?
The shekel is facing an important moment against the dollar. On June 1, the Israeli currency reached its strongest point in 33 years but has since lost half of those gains.
