Via Société Générale (overnight note)
- 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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Given the low registered under 1.1170, a heads up going into the European day. Friday afternoon can provide a lot of bang for buck spent, if the SNB are in an interventionist mood.
