In an overnight client note, analysts at Societe Generale note that the Swiss National Bank (SNB) is likely to intervene in the fx markets after EUR/CHF hit 20-month lows below the key support of 1.1184 a day before.
Key Quotes:
“The fall in the 10y Bund yield is also having side-effects in EUR/CHF. The pair dropped to a 20- month low of 1.1173 yesterday which must have placed the SNB on high alert and brought forward the possibility of intervention.
The SNB met over monetary policy only two weeks ago and reiterated that the franc is “highly valued”. The bank will be on high alert to slow a further depreciation of the pair, which is possible if the UK hurtles towards a no-deal Brexit on 12 April.
Key technical support rests at 1.1184, the January and September 2018 low. A break below is almost certain to force the SNB to respond and may temporarily prop up EUR/USD and other EUR crosses in the process.”
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