Patterns: USD/ILS, USD/ZAR

USD/ILS 1H Chart: Pair flashes bearish signals

Upside risks dominated the USD/ILS exchange rate late in July, as the Greenback appreciated 2.20% against its Israeli counterpart.

The rate is trading in a wedge which was formed at the beginning of 2018. However, it failed to reach its upper line and the monthly R2 before peaking at 3.7120—its highest position since March 2017. A subsequent fall and a breakout from the junior channel soon followed.

Given that the upside momentum has allayed significantly during the past few weeks, it is likely that the Greenback breaches the aforementioned wedge and falls even lower down to the monthly S1 and the 55-day SMA at 3.63.

The nearest important support level is the 100-hour SMA and the monthly PP. The rate might hinder near this area for some time before resuming its decline down to 3.63.



USD/ZAR 1H Chart: Breakout from channel

After testing the senior channel at 13.10 two weeks ago, USD/ZAR initiated a new wave north along the bottom boundary of this pattern. This movement soon lost its strength, thus resulting in minor consolidation starting from the beginning of August.

The pair's most recent development is a breakout from a strong resistance cluster formed by the monthly PP, the 61.80% Fibonacci retracement and the 200-period (4H) SMA at 13.43. The junior channel was breached along the way.

From theoretical point of view, this breakout should be followed by a surge, at least in the short term. The nearest upside target is the 13.80 level where the monthly R1 and the most junior channel are located. In case this appreciation does not occur, traders should wait for a fall below the 200-hour SMA and the senior channel that should confirm a price decline for a couple of session.


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