The shekel has performed mightily over the last two months, rallying some 6% in value, though the charts now indicate that the ascent seems to have run its course. As predicted in this column in late April, the shekel rallied steeply, going from 4.70 per dollar, to as high as 4.42 - however, after looking at the last week's trading patterns, it appears that a reversal in fortunes is in the cards. Once the shekel started declining in value, the key level of support was at 4.47. On May 15, this support level was tested, and sufficient buyers of the shekel stepped in and the currency rallied back to 4.43 on May 17. On May 22, the level was tested again, but this time there were far more sellers than buyers, and on the same day the shekel fell to as low as 4.51. Since then, there have been brief rallies, but the overall trend - from a technical standpoint - is still that the shekel is in decline. The current level of 4.52 is not particularly bullish for the shekel in the short-term as it would appear that it will continue to drift lower, with weak support at 4.57 and the first strong support level only being at 4.60. The only positive sign is that the fall has been very swift and steep - which could indicate that the shekel has been oversold - although the consolidation around 4.50 means that it is unlikely that the 4.50 level will be breached again soon. For now, the trading range looks to be 4.50 - 4.60, which means that the shekel has somewhat further to fall. 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.