EUR/CHF to find a solid support at the 1.08 level – ING

EUR/CHF dropped very close to the 1.0800 level this week, before bouncing back to the 1.0850 level yesterday. Economists at ING believe the pair has found a floor at the mentioned 1.0800 mark and will trade above it over the coming week.

Is 1.08 the bottom of the recent downtrend in EUR/CHF?

“The choppy risk environment is continuing to put downward pressure on the pair, and the SNB is likely stepping in with an increasing amount of FX interventions to curb the franc’s strength.”

“Next week, the ECB's rate announcement will be the main focus for EUR/CHF, as there are no market-moving events in Switzerland, but we do not expect a big market impact.”

“The recent rise in COVID-19 cases in Europe had the potential of turning into a driver for more EUR/CHF downside, but the approach shown by France (which appears to be a shared one across Europe) not to react with new restrictions but encourage vaccination is holding markets from re-rating Eurozone growth prospects. When combined with the SNB substantial FX interventions, we think 1.08 could be the short-term lower bound for EUR/CHF.”