Shekel Remains Stable, TA-35 Resumes Losses

Spot USD/ILS remains capped around the 3.96 area, with bulls struggling to force a sustained break through that figure. The pair last sits at 3.9520, barely changed on the day. Should recent highs give way, topside focus would shift to the round figure/Feb 22, 2016 high of 4.0000/4.0035. Bears look for a pullback under Sep 8 high of 3.8612.

• The TA-35 Index has shed ~0.9% today, partially reversing its two-day recovery. Reports of a military escalation on the Israeli-Lebanese border may have contributed to the unwinding of opening gains.
• The IDF conducted strikes against targets in on Lebanese territory, retaliating against an apparent Hezbollah missile attack. Click here to see our piece on the implications of the latest exchange of fire.
• Ex-BoI chief Karnit Flug told Bloomberg that the central bank's FX interventions are "huge" and recent measures should be enough to calm the market. She added that it was "hard to say" how rating companies would assess Israel.