Barclays Research discusses EUR/CHF outlook and targets the cross through 1.10 in both of Q3 and Q4.
"We forecast a slightly higher range for EURCHF than previously, as the EU’s Virus Recovery Plan marks an important step towards EU fiscal integration and should result in further unwinds of EURCHF shorts.
In the near-term, positivity from this symbolic move should outweigh uncertainties regarding the final size and composition of the package, or any disagreements among EU27 members for a unanimous ratification. In the longer term, however, we expect a weaker economic recovery in Europe to cause the common currency to slip lower. Moreover, a convolution of risk factors, including uncertainties on the pace of the global economic recovery, further virus outbreaks, the US election, US-China geostrategic rivalry and Brexit, should also keep medium-term CHF appreciation pressures intact," Barclays notes.
"The SNB will likely continue to use FX interventions to limit any outsized moves higher in CHF (towards 1.05) should risk sentiment deteriorate," Barclays adds.