Credit Agricole CIB Research discusses the EUR outlook and maintains the view that dips are attractive medium-term buy expressing that via staying long EUR/CHF targeting a move towards 1.1950.
"Elevated EUR short positioning suggests that many negatives are already in the price. Majors such as EUR/USD, however, have remained under pressure. This also appears to be largely to be driven by renewed USD strength," CACIB argues.
Next week’s Swiss inflation data is unlikely to imply rising upside risks to inflation. Such prospects should leave the SNB in a position to run a policy mix consisting of negative rates and currency intervention if needed for longer. Such a policy mix should continue to lower the franc’s safe haven appeal at these levels and is likely to keep the franc a sell on rallies. Please note that we stay long EUR/CHF as a trade recommendation," CACIB adds.