The performance of the shekel since the start of the war with Hizbullah began has confounded many analysts. Having lost almost 4% in the first two days of the conflict, the currency has reversed its decline and now stands at 4.36 against the dollar, higher even than the day the fighting began - in fact, at its best level since May 2005. As was predicted in this column on July 4, before the conflict, and again on July 25, some two weeks into the war, the shekel has rallied to the 4.36 level despite the hostilities since, on a technical basis, the currency has been in an uptrend since the end of March. Although external factors such as the conflict in Lebanon had a short-term impact on the direction of the shekel on the graph, the currency has overcome this with seeming ease and headed upwards, in line with predictions. The recent rise in interest rates in Israel, coupled with Tuesday's Federal Reserve decision not to raise rates in the US, will bolster sentiment in holding the shekel rather than fleeing the currency to seek higher returns elsewhere. The 4.36 level is quite important from a technical basis, as there appears to be some resistance on the charts to a further rise in value. However, assuming that the trend is still positive for the shekel, there ought to be a further push through this level over the coming sessions, which could herald a new trading range for the currency. "In our opinion the shekel is still headed up," commented Oli Greenspan, trader at London-based Hamilton Court Capital. "If the [4.36] level is breached, we could even see the shekel advance to attack the 4.30 mark." He cautioned, however, that if the shekel fails to break through 4.36 soon there could be short-term selling pressure on the currency, though he remained positive for the shekel's long-term direction. 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.