Shekel Breaks Out, Bank May Intervene


After a period of relative equilibrium, the shekel was surging against the dollar on Tuesday, causing analysts to anticipate Bank of Israel intervention, Globes reported.

“After three months in which the shekel-dollar exchange rate has been treading water in the NIS 3.80-3.90/$ trading band, the rate has broken below the bottom limit of the trading band and is heading beneath the low point of NIS 3.793/$, the lowest point since May 16,” FXCM Israel observed on Tuesday.

“Due to the fact that the two currencies were locked for a protracted amount of time within the range, breaking below it may have major significance on a technical level and bring out many long traders with stop orders for this point. Due to the technical importance, the Bank of Israel may choose to intervene around these price levels in order to halt the negative slide of the dollar, as it has previously done around critical technical levels.”