Swiss Franc May Be Slightly Overpriced

The latest CFTC Commitment of Traders report shows that as of January 7th, 2020, Swiss franc speculative net shorts decreased by 1,256 to 4,469 contracts. Among them, speculative longs decreased by 3,251 to 11,298 contracts, and speculative shorts decreased by 4,507 to 15,767 contracts.

At present, tensions between the United States and Iran have not yet calmed down, though both side seemed to have stepped away from further escalating the crisis. In short, the changes in geopolitical risks this week have a greater impact on the trend of the Swiss franc. If geopolitical tensions ease further, the Swiss franc will face downward pressure. We believe that the Swiss franc is slightly overpricedamong the G10 currencies.

The pivot point of USD/CHFis around 0.9712 in the first half of 2020. If the exchange rate closes above this price, the pair will be slightly bullish and may continue to rise to 0.9950 level.