Having just been asked my opinion on taking a short-term punt on a long EUR/CHF trade, I’ve done a bit of investigation to see what the interbank market thinks.

One of the bigger banks put out a small research piece overnight and they see EUR/CHF as being the prime mover over the next few weeks, and they see it heading a lot closer to 1.20 than 1.40 in Q1 2011.

The interbank dealer I spoke with is of exactly the same view. The weight of selling in USD/CHF remains very heavy and very consistent and as long as the EUR sentiment remains negative, EUR/CHF should continue to fall towards 1.2500 in the early New Year in his opinion.