Institutional FX Insights: JPMorgan trading Desk Views 4/6/26
JPM G10 FX Daily
## EUR: Dollar Setup Improving, But Still Not Chase Mode
Familiar story.
US data remains sound, and the dollar is grinding higher without much fanfare. Markets are still wary of some sort of Middle East accord, so nobody wants to be all-in on anything just yet.
It does underscore the growth dynamic if we can get past the geopolitics — and that remains a very big “if.” A resilient US economy plus any form of Middle East resolution should at least put a floor under growth elsewhere. That would likely bring people back into higher beta over the summer.
The question then becomes: how do you fund those longs if payrolls points toward a first Warsh communiqué that might not be to the President’s liking?
Given that setup, I am still edging slightly long USD in G10. Preferred expressions remain:
- USD/CHF
- USD/CAD
USD/CHF traded well yesterday, closing above the 200dma just above 0.7900. We now need a good weekly close. Swiss CPI this morning offered no fireworks to derail the price action. I have taken some profit in cash ahead of tomorrow’s NFP to be prudent, but still own topside.
On CAD, if tomorrow’s numbers confirm a still-depressed Canadian economy and widening US-Canada divergence, I will add.
On the other side, I still like:
- MXN into USMCA talks.
- ZAR on any sort of Middle East resolution.
- Reselling EUR/HUF if it can rally a bit further.
The market has also become excited about a Czech rate hike in June, which is now fully priced. With this morning’s inflation miss, I do not mind a tactical long EUR/CZK here.
As for EUR itself, there is just not much to say. It feels soft on the margin, but there is no momentum. We remain in familiar territory, and I would rather express USD length elsewhere in G10 for now.
Maybe payrolls can inspire a break. But given the popularity of bearish EUR positions on the crosses, lingering Iran uncertainty and the risk of a hawkish ECB message next week, I am not personally in chase mode.
Trade bias: Mildly USD-positive, but prefer USD/CHF and USD/CAD over EUR/USD.
USD/CHF: Closed above 200dma near 0.7907; need weekly confirmation.
CAD: Add if US/Canada data divergence is confirmed tomorrow.
EUR: Soft, but not enough momentum to chase.
Other expressions: Long MXN, tactical long EUR/CZK, resell EUR/HUF on rally.
Risk: Middle East MOU triggers temporary USD selloff.
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## GBP: Top Up EUR/GBP Near Support
US data continues to look solid into tomorrow’s NFP.
Price action reads like the market wants to get longer USD, but MOU headline risk and doubts over Warsh remain clear obstacles to more aggressive positioning. It is hard to have an edge in either, but a solid NFP would build confidence in a more hawkish June 17 Fed.
Sterling remains relatively sidelined.
The by-elections are approaching, and while there is some promise around the fiscal rules, Burnham has still not confirmed any specific commitment. He also cancelled a meeting with the hedge fund community this week in favour of doing more Makerfield door-to-doors.
Questions are beginning to build around how he plans to enact change within the Labour Party, but it seems unlikely we get anything meaningful before the Makerfield result. His true colours will come out — it is just a question of when.
I topped up the core EUR/GBP long a little as we neared 0.8600/20 support yesterday, trying to improve averages during this holding period.
Flows:
- SHF sold 1z GBP yesterday.
- Their recent GBP buying streak has now lost momentum.
- They are still longer GBP than before Epic Fury and the UK locals.
EUR/GBP 0.8600/0.8700 should hold for now.
Cable zones remain:
- Support: 1.3370/80
- Resistance: 1.3490/10
Bailey speaks later at 16:40 BST.
Trade bias: Core long EUR/GBP, topped up near support.
**EUR/GBP range:** 0.8600/0.8700.
**Cable support:** 1.3370/80.
**Cable resistance:** 1.3490/10.
Political catalyst: Makerfield by-election.
Risk: GBP remains rangebound until politics reactivates.
---
## JPY: Stay Modestly Long via CHF/JPY
No real surprises from Ueda yesterday. The market has ticked up to around 23bp priced for this month.
We also had more source headlines this morning pointing to a hike and suggesting another is possible in 2026. I should hope so too, given 45bp is already priced by year-end.
The only real movement yesterday came from Takaichi, who mentioned FX intervention in Parliament:
> “To take appropriate steps on FX as needed at any time.”
Again, nothing new. But with USD/JPY trading around 160, it is understandable that some JPY was bought.
No change in view.
I prefer to keep a modest JPY long against CHF:
- It trades like a low-beta USD long anyway.
- It earns positive carry.
- MoF are likely not far away.
US Challenger and initial jobless claims come later.
Trade bias: Modest long JPY.
Preferred expression: Short CHF/JPY.
USD/JPY: Around 160, intervention risk live.
BoJ pricing: Around 23bp for June; 45bp by year-end.
Risk: Strong US data pushes USD/JPY deeper into intervention territory.
---
## CHF: CPI Keeps the Short CHF Case Alive
Swiss headline inflation came in line with the prior month and slightly below expectations. That broadly aligns with SNB forecasts.
It is not a smoking gun, but it adds momentum to the short CHF view by keeping rates and carry pinned around 0%.
Yesterday’s stronger US data pushed USD/CHF above the 200dma at 0.7907, as the dollar traded well more broadly.
We remain bearish CHF and continue to hold shorts against both USD and AUD. That said, we have taken a bit back in USD/CHF ahead of tomorrow’s NFP.
Flow-wise:
- RM demand for CHF continues.
- Systematics have been selling CHF for four straight days, starting to reduce the impressive CHF longs built since Liberation Day.
Trade bias: Short CHF.
Preferred expressions: Long USD/CHF and AUD/CHF; short CHF/JPY.
USD/CHF technical: Above 200dma at 0.7907.
Tactical: Took some cash profit pre-NFP but still own topside.
Macro: Swiss CPI keeps SNB/carry pinned near 0%.
Risk: NFP disappointment sends USD/CHF back below the 200dma.
---
## AUD / NZD: Long AUD/NZD, But Trimmed Ahead of Resistance
After aggressive SHF unwinding of AUD/NZD last week following the hawkish RBNZ and softer monthly Australian inflation, the cross has rallied around 1.5% off the lows.
On Monday I suggested rebuilding AUD/NZD longs.
The cross has now stalled ahead of the 61.8% Fibonacci retracement of last week’s move lower. But with AUD/NZD closing above the 50dma near 1.2142, and RBA Governor Bullock echoing Harper’s comments that inflation remains too high, I retain AUD/NZD longs.
Full disclosure: I have reduced slightly ahead of resistance.
Technically, I would like to see:
- A second consecutive daily close above the 50dma.
- A break of 1.2172.
That would further encourage the bullish view.
Interestingly, internal flow did little to explain yesterday’s NZD underperformance. But with VIX on a 16 handle, relative-value carry plays should make sense in a world where investors are hunting for yield.
Trade bias: Long AUD/NZD, trimmed slightly.
50dma: Around 1.2142.
Confirmation: Second close above 50dma and break of 1.2172.
Target if confirmed: Recent highs near 1.2300.
Risk: Resistance holds and NZD reasserts post-RBNZ strength.
---
## CAD: USD/CAD Clears 1.3900
USD/CAD continues to grind higher and has finally cleared 1.3900 this morning, keeping near-term momentum pointed higher.
It is no secret that I have been bearish on the Canadian economy for some time. I remain short CAD, with the view that the currency can retrace back toward its year-to-date lows as the macro backdrop remains challenged.
Attention now shifts to tomorrow’s dual payroll releases from the US and Canada.
I would look to add to CAD shorts if the data continues to underscore a clear divergence between the two economies:
- Resilient US labour market.
- Softer Canadian labour market.
USMCA negotiations also remain an important swing factor. As flagged previously, Canada does not look particularly well positioned in the current setup, which should act as an additional tailwind for CAD weakness.
Very little to note from flows yesterday, with the desk seeing only modest CAD supply.
Trade bias: Short CAD.
USD/CAD: Cleared 1.3900.
Add trigger: US/Canada payroll divergence tomorrow.
Macro view: Canadian backdrop still challenged.
Risk: Canada data surprises stronger or oil/risk gives CAD relief.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!