Danske Research maintains a neutral bias on EUR/CHF in Q4 targeting the cross around 1.08 in 1 and 3 months.
"The lack of clear reflation support from the Fed has left EUR/CHF with little direction for now. The SNB is preparing to continue to sweat out the deflationary pressure in the Swiss economy (CPI running at -0.8% y/y): intervention remains the key policy tool and the SNB has started to publish quarterly intervention data in a move towards more transparency on this after the US put it on watch for currency manipulation. Policy rates are set to stay unchanged at the long-standing -0.75% for an extended period of time," Danske notes.
"We see EUR/CHF range-bound in the absence of a clear reflation or recovery catalyst, stuck in a 1.07-1.09 range for now. Risks remain asymmetric longer term, as the SNB holds the downside in check and a global recovery in 2021 brings some relief to the undervalued pair," Danske adds.