FxWirePro: EUR/CHF recovery capped at cloud top, focus on German Zew surveys for further direction

EUR/CHF chart on Trading View used for analysis

• EUR/CHF halts downside, edges higher to trade 0.16% higher on the day.
   
• Upside remains capped at daily cloud top at 1.1449, intraday bias neutral to slightly bullish.
   
• We see bearish divergence on Stochs which keeps scope for bearishness in the pair.
   
• Further the pair has formed successive spinning top and doji formations at highs.
   
• Break above 38.2% Fib at 1.1498 will see resumption of upside. Scope then for test of 200-DMA at 1.1596.
   
• On the downside, break below 21-EMA at 1.1391 will see dip till 1.1345 (trendline).
   
• Italy's government late Monday approved a draft budget law, under which the budget deficit is set to widen to 2.4% of the gross domestic product, in defiance of EU rules.
   
• Italy-German yield differentials could rise in the EUR-negative manner. Also, focus on German Zew survey for further direction.
   
• Below forecast German Zew surveys, scheduled for release at 09:00 GMT, could further dent the single currency.

Support levels - 1.1402 (55-EMA), 1.1391 (21-EMA), 1.1345 (trendline)

Resistance levels - 1.1469 (110-EMA), 1.1498 (38.2% Fib)

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