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CHF Rallies on Safe-Haven Demand

The Swiss Franc has been the strongest currency over early European trading on Monday. As risk aversion sweeps across markets on the back of the SVB collapse last week, safe-haven demand for the Franc has increased heavily. With inflation recently seen coming in above expectations and with SBN head Jordan warning that rates might need to continue higher as a result, CHF has been a firm favorite recently, gaining against currencies where central bank expectations have turned more dovish.
 

SNB/BOC Divergence

CAD has been among the weakest currencies today. The BOC recently held rates on hold, marking a cessation of its recent tightening campaign. With inflation cooling and the bank has signaled its intention to hold rates unchanged for the time being, the divergence between the outlook from the SNB and the BOC is playing nicely into CADCHF downside. With the retail market holding a more than 90% long position in the pair, there is plenty of room for the current sell-off to continue near-term.
 

Technical Views

CADCHF

(Click on image to enlarge)

The breakdown below the .6781 level has seen the market continuing lower within a narrow bearish channel, marking new all-time lows for the pair. While below .6781 the focus is on a further push lower with a test of the longer-term bear channel the next downside target below the current .6620 lows. 

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