Institutional FX Insights: JPMorgan Trading Desk Views 15/4/29
JPM G10 FX
EUR
The tone in EUR remains relatively quiet, but the broader backdrop is still mildly supportive as markets continue to trade with a better risk tone and the USD remains structurally soft. Conviction is limited given lingering Middle East uncertainty, but the bias remains to hold core EUR longs, albeit at reduced size near the 1.1800/30 resistance area. The inability to sustain a clean break above 1.18 argues for some caution near term, though dips toward the 1.1670–1.1700 moving-average cluster are seen as opportunities to add. EURGBP longs are also preferred, reflecting a weaker UK macro backdrop and growing political noise.
GBP
The GBP outlook remains fragile. Recent BoE commentary reinforced concern around persistent inflation and rising stagflation risk, while the UK macro backdrop already looked weak even before the latest energy shock. The strong demand at the latest gilt auction does little to change that broader picture. The preferred expression remains long EURGBP, with focus now turning to UK GDP and next week’s labour data for confirmation of deteriorating fundamentals. Flow-wise, hedge funds were sellers of GBP again, although systematics have been modest buyers.
JPY
The JPY tracked G10 peers more closely yesterday, supported briefly by reports the BoJ may sharply raise its inflation forecasts, though that move in rates pricing has since faded. The broader stance remains neutral for now: on one side, there is still latent risk of official sensitivity to excessive JPY weakness above 160; on the other, high global yields, elevated energy prices, and unchanged GPIF dynamics continue to argue against chasing the yen stronger. Flows were mixed, with systematic buying offset by hedge fund and corporate selling.
CHF
CHF remains supported by ongoing reserve manager and systematic demand, and should perform well if the market shifts further away from US assets and the dollar continues to weaken. That said, hesitation remains around turning outright bullish, as a significantly stronger franc would likely provoke a louder response from the SNB. The fact that USDCHF struggled to break materially below 0.78 despite a softer dollar reinforces the case for staying relatively neutral for now.
AUD / NZD
The AUD remains favoured on dips as the USD stays under pressure and broader sentiment remains constructive despite unresolved Middle East tensions. While concerns around tighter oil markets and the global growth outlook persist, the working view remains that the USD is a sell on rallies. Flow data were mixed, with macro and hedge funds selling AUD, but that was more than offset by real money and corporate demand. Assuming Australian employment does not surprise materially, AUDUSD could retest the year’s highs over the coming sessions.
CAD
The CAD continues to see steady real money demand, and the market has already monetised a large part of the recent short USDCAD tactical trade as spot approaches key moving averages. Even so, the broader fundamental view on Canada remains cautious, with the expectation that the loonie underperforms other high-beta commodity currencies in a pro-risk environment. As a result, the preference is less for outright CAD longs and more for being short CAD on crosses.
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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!