Societe Generale Research discusses EUR/CHF outlook and targets the cross at 1.07, 1.09, 1.10, and 1.11 by Q1, Q2, Q3, and Q4 of 2021 respectively.
"Since the de-pegging of the franc, it is likely that 1.10 has been the trigger level for SNB FX intervention. This year has seen this policy tool return in a big way to prevent excessive currency strength, and the central bank has probably managed EUR/CHF so that it does not break through 1.05, an event that would have dangerously opened the door to parity," SocGen notes.
"While interventions started to ease off in June, they seem to have really paused only since October, while EUR/CHF has still been trading in a 1.06-1.09 range. Given the failure to bring the pair back above 1.10, the SNB’s reaction function has probably changed. While the exchange rate level remains concerning, decreasing volatility has mitigated the risk of a fast appreciation. All in all, it seems that the SNB is now committed to defending 1.05 but is more tolerant of franc strength if volatility risk does not warrant FX interventions," SocGen adds.