Last week, NZD/CHF was the worst-performing trade but analysts at Bank of America Merrill Lynch think it is a buying opportunity.
Their reasoning is based on current account numbers and seasonals. They note that CA deficit countries like New Zealand have posted some of the largest underperformance since late 2008 because of risk aversion. They say surplus countries (like Switzerland) tend to outperform in May, July and times of strong macro themes. They say those themes will subside later this year.
NZDCHF at support
I tend to think trading with such complicated reasoning is dangerous. The reasoning to buy NZD/CHF may simply be support near current levels.
