USD/ILS (3.922) TAG views the overall pattern for USD/ILS as down with a Head & Shoulders topping pattern marking the 5.014 all-data high in 2002. The H&S target was met in 2007 at the 3.50+- area, leading USD/ILS eventually to 3.202 low in July of 2008 (-36%) - See chart 1. Since then, USD/ILS has been confined to a large contracting range, featuring overlapping price action, which makes sense after a -36% decline. KEY - After peaking at 4.098 this past July (short of 4.108 projection, the low end of TAG's LT resistance zone), USD/ILS traced out a 5-wave, 'impulse' wave, down into the mid-October low at 3.78. Off the 3.78 low, USD/ILS rallied in a 3-wave, corrective fashion, peaking late last week at 3.983 (November 15th), just pps shy of a Fibonacci 61.8% retracement - See Chart 2. With that said, TAG's BEARISH against the 3.983 high, the bearish case is best served by USD/ILS staying below 3.95 / 3.97 = pre warning back above. Below the 3.90+- area, the next downside attraction is located at the 3.87+- area.
