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May 17 - 05:00 PM
CHF: Lower CHF Remains A 'High Conviction Call'; Looking To Sell CHF/JPY Rallies - BofAML
First appeared on eFXplus on May 17 - 02:45 PM

Bank of America Merrill Lynch Research discusses CHF outlook and maintains a structural bearish bias looking to express that via selling CHF/JPY bounces into the the 111.80-113.25 area.

"One of our high conviction calls over the past 18 months has been for a weaker CHF....We think the broader trend of further CHF weakness is set to continue in the months ahead with longer-term relationships still suggesting marked overvaluation.

...We think this presents an opportunity to sell CHF rallies and buy JPY's dip and we reiterate our medium-term conviction in a lower CHF/JPY which also benefits from a favorable technical backdrop," BofAML argues. 

"We think this cross can be sold in the 111.80-113.25 area, which is the medium-term technical resistance area. We think this could trend lower to retest the 2016 base in the +/- 103 area," BofAML advises. 

 

Source:
BofA Merrill Lynch Research/Market Commentary

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