FxWirePro: Sell Euro against Franc targeting 1.11 area

We expect the Swiss franc to outperform the single currency, at least, in the near term.

• We expect the focus on the economic trouble brewing in the Eurozone likely to help the Swiss franc gain against the euro.
• This month’s data has confirmed once again that the slowdown in Eurozone is very real.
• Spanish manufacturing PMI declined to contraction territory; it was 49.9
• Italian manufacturing PMI declined further into contraction territory; it was 47.7
• German manufacturing PMI was even worse at 47.6. Employment in the month of February declined by 21,000, the worst number since September 2018.

On the other hand, Swiss manufacturing is doing well,

• Swiss PMI expanded further into expansion territory; it was 55.4 in February, up from 54.3

We expect, ECB to also weigh on the euro,

• Given the weakness in the export-driven German economy, we expect the ECB to talk down the euro, which would be a boost overall Eurozone exports.

Trade idea:

• Sell euro against franc at the current rate of 1.136 and at rallies with the stop loss around 1.15 area, and a target of 1.11 area.