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EUR/CHF Outlook: Investors Turning Bullish on CHF, Despite SNB FX Intervention

EUR/CHF Outlook: Investors Turning Bullish on CHF, Despite SNB FX Intervention

2019-09-03 11:00:00
Justin McQueen, Analyst
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EUR/CHF Analysis and Talking Points

  • Swiss Franc Benefits from Safe Haven Flows
  • Speculators Turning Bullish on CHF Despite SNB Intervention

Swiss Franc Benefits from Safe Haven Flows

The Swiss Franc trades at a fresh 2-year high against the Euro with EUR/CHF hovering around 1.0830 as safe-haven flows continue to dominate. The rising threat of a no-deal Brexit, alongside the little progress made on the trade war front between the US and China has seen the safe-haven Swiss Franc benefit. That said, with the ECB looking to unveil a new QE package at the September meeting, risks remain tilted to the downside for EUR/CHF with focus on a move towards the 1.05-1.06 area.

Speculators Turning Bullish on CHF Despite SNB Intervention

The latest CFTC report showed that speculators are beginning to turn bullish on the Swiss Franc with outright longs doubling to 14,235 contracts from 7,925 contracts. Consequently, CHF net shorts are at the lowest level since the back-end of 2017, which in turn highlights that speculators are seemingly testing the nerve of the SNB who have continued to intervene in stemming the appreciation in CHF since the 1.10 break.

EUR/CHF Price Chart: Weekly Time Frame (Jan 16 – Sep 19)

EUR/CHF Outlook: Investors Turning Bullish on CHF, Despite SNB FX Intervention

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

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