Synopsis:

ANZ suggests selling EUR/CHF on short-term rallies, citing limited upside without Swiss National Bank (SNB) intervention. Simultaneously, they recommend buying USD/CHF medium-term, leveraging higher US yields and persistent European geopolitical risks.

Key Points:

EUR/CHF Outlook:

• Short-Term View: Sell on rallies above 0.95, targeting 0.92.
• Rationale:
  • EUR/CHF lacks upside momentum despite SNB rate cuts and intervention threats.
  • The EU's uncertain economic outlook limits potential gains.
  • Expectation: Downward pressure persists without explicit SNB action.

USD/CHF Outlook:

• Medium-Term View: Buy USD/CHF on dips around 0.88, targeting 0.91.
• Rationale:
  • Yield Support: Higher US yields increase USD attractiveness.
  • Geopolitical Hedge: European geopolitical concerns favor the USD over the CHF.
  • Historical Reference: 2022's risk-driven CHF moves suggest USD/CHF upside under similar conditions.

Conclusion:

ANZ favors a dual trade strategy: short EUR/CHF on rallies and long USD/CHF on dips. The strategy hinges on the SNB's policy stance, US yield trends, and geopolitical developments in Europe. Investors may position accordingly based on these dynamics.