What's next for the euro and Swiss franc

Bank of America Global Research adopts a cautious bias on CHF and sell-on-rallies bias on EUR/CHF.

"The headline weekly sight deposit data rose again through week-ending April 17th. . Whilst this is another all-time high in deposits, the pace of accumulation has slowed. We would urge caution over-interpretation of the data as we explain below. Nonetheless, we think that EUR/CHF should continue to grind lower back towards the recent lows (1.05). A more fuller explanation for the latest weekly sight deposit holdings will emerge when the next batch of deposit data is released over the coming weeks and culminating in the official April FX Reserves data (7th May)," BofA notes.

"The prevailing environment leaves us cautious on the outlook for EUR/CHF and we think that there is likely to be another test of 1.05 should market conditions remain uncertain. Our bias is therefore to sell EUR/CHF rallies. Watch BTP spreads through this week's EU meeting. Further widening should pressure EUR/CHF through 1.05," BofA adds.

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What's next for the euro and Swiss franc