The Swiss franc was slightly firmer against the euro on Monday, but pulled back from a one year high against the dollar as the greenback rallied against major currencies after plumbing year lows on Friday. The franc was bid up against the euro compared to New York's Friday close of 1.5129 francs per euro, trading at 1.5119 per euro.
"The Euro/Swiss franc is eroding its 200 day moving average and this leaves it under pressure to sell off to key support at 1.5010/1.4980 (recent lows and support line), we look for this to hold the downside and prompt recovery," said a technical research note from Commerzbank.
The franc traded down against the dollar at 1.0412 francs per dollar compared to Friday's close of 1.0378, after hitting 1.0336, its highest level in over a year, during Friday trading. In the medium term, some analysts expect the franc to continue to show strength against the dollar, although any upward move against the euro is likely to remain in check.
"With the 'SNB bid' still a very valid option in the euro/franc into their next MPA (monetary policy assessment) and beyond, we expect the big moves to take place with dollar/franc going forward," said UBS economist Reto Huenerwadel in a research note.
"We thereby find it difficult to see the SNB trying to support the US dollar on a larger scale," Huenerwadel said. The SNB is widely expected to stick to its ultra-loose monetary policy at its meeting on Thursday, including the intervention policy, as some deflation risks remain despite recent signs of an economic recovery.