Buy USD/CHF for the week ahead - Westpac

Research Team at Westpac, suggests that according to their model, macro and technical inputs they maintain a buy USD/CHF signal for the week ahead.

Key Quotes

“Last week’s bullish scores for USD/JPY and NZD/USD both remain in place too but the strength of the signal has moderated and the buy on weakness recommendation is removed.”

“Continued deflationary reads on CPI and repeated comments from SNB members that they are content with NIRP and would be willing to add to negative rates if needed should see the SNB maintain its policy stance. The sanguine response to the Italian referendum has not resulted in any safe haven flow, leaving CHF with a persistent negative bias. We buy USD/CHF at 0.9995, stop 0.9890.”

“The lack of risk aversion on the Italian referendum combined with the soft economic backdrop and likelihood for SNB to continue or even extend NIRP leave CHF vulnerable to further policy differential related weakness.”