EUR/CHF rallied for 6 straight days before today's pullback
Reasons for the strength:
- The market is thin according to their data
- Safe-haven flows may be unwinding
- Intervention is unlikely
"The most likely explanations for the recent move appear to be either large one-off flows or unwind of safe-haven inflows triggered by the Greek crisis. With the latter out of the way, the risk reward for being short francs has certainly returned but may require imaginative risk management given thin market liquidity. Any evidence of domestic outflows would provide much greater confidence to enter the trade," Deutsche Bank writes.
Bottom line:
Short EUR/CHF or long USD/CHF
