By Justin McQueen

Apr 8 (Reuters) - EUR/CHF has backed off the 200-day MA cluster at 0.9260/71 yet again, sliding to 0.9200. Those who chased the cross higher on the back of the U.S.-Iran two-week ceasefire have been left disappointed and the drop suggests that the path of least resistance remains downwards.

The Swiss National Bank’s FX reserve data is the other talking point. Reserves jumped CHF 11 billion last month – the biggest increase since October – which aligns with the bank’s step up in rhetoric against CHF strength. On the surface that sounds bullish for the cross, but the data does not support it. Looking back at previous instances where reserves rose CHF 11 billion or more, EUR/CHF averaged a 0.6% decline over the following 20 days and was higher only 38% of the time. So the print does not give a green light to get bullish.

Near-term though, absent a clean break through those 200-day MAs, this is consolidation territory. The ceasefire has taken the tail risk of a full-blown U.S.-Iran escalation off the table, so a move to 0.90 looks to be off the table for now. But with both sides still far apart on anything durable, we are not out of the woods and that limits how far this cross can run to the upside from here.
EURCHF daily chart


eurchf return after fx reserves rise


Justin McQueen is a Reuters market analyst. (The views expressed are his own). ((Email: ))