Downside risks for the EUR/CHF pair are set to persist according to analysts at MUFG Bank. They have the idea of a short trade with a target at 1.0350 and a stop loss at 1.0670 as they argue the Swiss National Bank (SNB) is still leaning heavily against the wind.
“The pair continues to remain under downward pressure, and we are anticipating an eventual break below the 1.0500-level and beyond.”
“Total sight deposits have increased for seventeen consecutive weeks now and by a cumulative CHF84.5 billion.”
“The COVID-19 shock has provided an unprecedented shock to the euro-zone economy. It is likely to widen economic divergence between northern and southern members, and has heightened concerns over long-term debt sustainability. If not addressed effectively, it has the potential to seriously challenge the sustainability of the monetary union. The recent German Constitutional Court ruling challenging the legality of ECB support has further complicated proceedings.”
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