The currency reached an 11-month high of 4.42 per dollar on May 11, and fell back as low as 4.54 at the end of the month.
By SETH FREEDMANshekels 88(photo credit: )
Since the shekel's meteoric rally against the dollar during April and early May, its movements have become somewhat more subdued.
The currency reached an 11-month high of 4.42 per dollar on May 11, and fell back as low as 4.54 at the end of the month. It currently stands at 4.47 - at a crossroads and trading tightly within a narrow band of between 4.49 and 4.45.
There is evidently some resistance at 4.45, and until it breaks decisively through this level, serious buying is unlikely to materialize.
"[The shekel] is trading in a tight range and, as we head into the summer, the volatility will diminish," said Oli Greenspan, a trader at London-based Hamilton Court Capital. "We would like to see it break through 4.45 before we become buyers."
This view also was reflected by analysts at Gift Asset Management. "In the coming weeks we expect... the shekel to trade between 4.45 and 4.50, barring any shocks," they said in a note to clients.
From a technical standpoint, there is little to work with at current levels though, with a burgeoning Israeli economy, the fundamentals look positive for the currency. On Sunday the Bank of Israel announced an upwards revision in its estimates for the economy's yearly growth rate, from 4.3% to 5%.
News flow like this should bolster investor sentiment in the shekel, though traders will be loath to get involved whilst the current trading range is maintained.
Technical analysis is the study of trading based on previous performance, focusing exclusively on price movements rather than the fundamentals of the index/currency involved.
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