Will we see SNB intervention?

24.07.2019 / 09:54

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The Swiss franc continues to appreciate against the euro, helping the Euro Stoxx futures and they are rising. However, with the price approaching 1.10, which is a key level for EUR / CHF, again, among the traders, the question arises: How much can the franc rise before the Swiss National Bank intervenes?

Deutsche Bank has recently announced that it has entered a EUR / CHF short for 1.1003. Their deal has a target of 1.0800 and a stop moi of 1.1180. Their deal was concluded with the following arguments: The profitability of the German Bund is good. Weekly CHF deposit data does not give a strong signal of intervention by the SNB. Positioning here is acceptable for an additional, short-term EUR / CHF exchange rate.

The following macroeconomic and fundamental conditions must remain in force: Global growth concerns remain valid, tensions between the US and China remain high and the ECB confirms its dovish position on Thursday to allow EUR / CHF to continue your movement down. However, it is entirely possible for the bank to intervene, and you should keep this in mind if you are shorting the currency pair.

Only after two months is SNB's next meeting, and the ECB may surprise with a dovish stance, leaning toward a lighter policy.

Graphs: Used with permission of Bloomberg Finance L.P.

Trader Martin Nikolov

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Will we see SNB intervention?

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