Credit Agricole CIB Research discusses EUR/CHF outlook and maintains a bullish view, recommending buying the cross on dips. CACIB is already long EUR/CHF* targeting a move to 1.1950.
"We remain of the view that crosses such as EUR/CHF should be bought on dips, irrespective of weaker risk sentiment. As explained previously we believe the SNB’s policy mix consisting of negative rates and currency intervention if needed is likely to reduce the currency’s safe haven appeal at these levels.
In addition, speculative positioning has been broadly balanced as confirmed this week’s FX positioning update and such conditions should keep position squaring-related CHF upside risks low from here.
In addition, we see little scope of the ECB turning more dovish on monetary policy, regardless of increased political uncertainty. This in turn suggests wider policy differentials should ultimately guide the cross higher," CACIB argues.
*Recorded in eFXplus Orders