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Market Analysis

Technical analysis of USDILS

June 20, 2019
BY Michael Stark

Dollar-shekel (USDILS) has been somewhat volatile on the four-hour timeframe although this pair’s recent range on the dailies is mostly intact. We can point to 3.636 as high resistance and 3.565 as low support on this timeframe. Both of these levels appear to be quite strong, so a retreat could be observed if price reaches either area.

Technical indicators on USDILS H4

The usual combination of moving averages indicates a sell signal for USDILS here. We can observe that the 50-period SMA death crossed both the 100 and 200 SMAs in the second half of last week. The faster 20-period SMA from Bands reacted more quickly to last week’s upward retracement, though. The most important area of resistance nearby from MAs is the area of the 50 SMA around 3.5925.

Bollinger Bands (20, 0, 2) currently indicate oversold conditions: the current candle is almost entirely outside the lower deviation. Expanding deviations also suggest that volatility is increasing. Conversely, the signal line from the slow stochastic (15, 5, 5) on this timeframe has yet to follow the main line into the oversold zone. Meanwhile MACD has extended downward over the last two periods, with the histogram now in negative territory.

Overall, then, this selection of indicators generates a sell signal. Furthermore, MACD’s extension could suggest a continuation downward despite the possibility of oversold conditions from both Bands and stochastics.

Price action and Fibonacci

Price action suggests a strong sell signal for USDILS. We can see three fairly large down candles from yesterday evening followed by a failure so far to make any notable retracement. The current candle has retraced about half of the previous period’s downward movement, a traditional sign that this could be a decent point of entry for a short-term sell. However, completion of the present candle would provide confirmation. One should also note that the previous period’s long wick suggests continuing volume of buyers.

Fibonacci here is based on the downward movement from the end of last month within the range on the daily chart of USDILS. The area of the 50 SMA’s meeting with 38.2 Fibo around 3.5925 could be fairly strong. Beyond this, traders should monitor the area of the 61.8% retracement from which price resumed downward progress yesterday.

Technical analysis USDILS: summary

Technical indicators on the four-hour chart of USDILS overall suggest a fairly strong sell signal. Nonetheless, it is important to monitor stochastics for a possible crossover in oversold. Also, the fundamentals of the shekel can be prone to sudden changes.

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