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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)

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex
 

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