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Nomura: how to trade the CHF?

EUR/CHF is edging closer and closer to the 1.2000 floor. According to strategists at Nomura, Gold Referendum (30 November) and the ECB meeting (4 December) will likely render some more support to the Swiss franc versus the euro.

For this reason, analysts say, the need for SNB interventions is increasing. SNB will likely sell the Swiss franc versus GBP, CAD and AUD, so traders are invited to watch these pairs carefully.

Swiss regulator is also expected to buy EUR in the coming months, but is not very clear whether EUR/CHF will push much higher from the current levels. This is what happened in mid-2012 despite the large interventions.

“On a 6-month horizon, we view the 1.2000 floor as credible, but SNB interest rate action may be required to avoid the need for more permanent FX intervention,” Nomura adds.

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