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EUR/CHF: Hedge funds looking to increase long bets en-route to 1.35

I had a long chat today with a big hedge fund and they are of the same opinion as me, that we will soon see a sharp weakening in the CHF. He’s not 100% sure what will drive the big asset managers to start hedging or selling their Swiss assets, but he thinks the time is coming very soon. He says that many other like hedge funds are thinking the same way and are preferring to play the strategy through EUR/CHF rather than USD/CHF.

Prime brokers were reporting bids in EUR/CHF starting at 1.2500/10 so maybe they are starting to chase this one higher?

  1. So they prefer EURCHF then USDCHF, could mean EUR have plenty of room to the uspside while Dollar strength is almost over ?

  2. That seems to be their view, that EUR/USD will tend higher rather than lower, so I guess this would mean that recent USD strength becomes diluted. But USD/CHF would also move back above 1.00 in a true EUR/CHF cross move. If I’m not mistaken, the last time EUR/CHF was trading near 135 was around 3 years ago, and EUR/USD was trading near 130 and USD/CHF near 104. Shows once again that the FX mkt is one biog range trade

  3. Like every trade its a bit risky, but if you start with a small position here near 12500 and see what happens. If a base starts to form on s/t charts then you can always add to the position. I certainly wouldn’t take a large position at this random point in time, but I do strongly believe that we will see 135 in the cross fairly soon

  4. Short-term technicals look quite bullish to my biased eye Cozmin but as always with EUR/CHF its best to be v v patient. I think a base might form 12470/12500 for nexty push higher. If we have daily close below 12450 then I will be worried about a deeper retracement. That’s how I see it at the moment

  5. As you know Papillon I am overall bearish on CHF at moment but I’m wondering whether the mkt isn’t already overly short CHF also? If doesn’t seem to want to fall; both USD/CHF and EUR/CHF don’t seem to bounce very much? And Yen crosses are a bit of a worry as well?
    If the stop is tight, then I would certainly give it a go but pick entry lvls carefully

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