Institutional FX Insights: JPMorgan Trading Desk Views 23/6/26
JPM G10 FX Daily
EUR: Hard for USD to Keep Going Without Data
My thinking is that it will be hard for the dollar to go straight up purely on continued Fed enthusiasm unless the data corroborates the hawkish dot plot.
So I was somewhat surprised by the extension later yesterday, given there was very little new news.
Lagarde’s comments probably helped push EUR lower, and the overnight tech selloff also gave USD an assist.
But I find it hard to time when tech is amazing versus when it is overdone. I will leave that to the so-called experts.
PMIs are due today, and we are moving into the month-end, quarter-end and half-year-end zone.
With little else of importance on the data calendar, this could be a messy week.
Risk: No Major Change
No real changes to risk here.
I am a little under pressure on the EM side given the risk-off tone, but generally happy to hold:
CHF shorts
ZAR longs
HUF longs
I am a little wary of the uptick in CHF positioning from Pat Locke’s note last night.
EUR/USD: 1.1400 Still the Line
Lagarde took some wind out of ECB hawkishness and out of EUR crosses.
July pricing is now close to zero.
With oil languishing, that makes some sense. Lower oil takes the ECB closer to its baseline scenario, which still involved three hikes but with less urgency.
The French PMI just showed a small bounce, especially in services, and beat expectations.
Let’s see how the broader PMIs shake out.
The key remains 1.1400.
Until that breaks, I am happy to have taken off EUR/USD shorts for now.
Trade bias: Neutral for now; re-sell only on confirmation or rallies.
Key support: 1.1400.
Trigger: Close below 1.1400 to re-engage downside.
Catalysts: PMIs; month/quarter/half-year-end flows.
Risk: Better PMIs squeeze EUR from support.
GBP: Burnham Coronation Odds Rise, GBP Can Trade Better
Streeting backing Burnham yesterday significantly raised the odds of a coronation.
That is good news for GBP.
If Burnham avoids a full contest, he does not need to make promises to Labour factions that either he cannot keep or that markets will dislike.
There are still some who think a coronation is unacceptable.
Cairns and Jones — Starmer’s former chief secretary — have refused to rule out putting themselves forward to create a contest.
Whether they have the numbers is another question, but Starmer’s timetable gives them time to find out.
Market Read: Short EUR/GBP
We sold some EUR/GBP on the Streeting news.
Like our colleagues in Strategy, we think GBP can continue to trade well.
The key concern would be Miliband being appointed Chancellor.
But the noises around Burnham suggest we are far from his old “in hock to the gilt market” comments.
No surprise to see short-term hedge funds as big GBP buyers yesterday, after last week’s acute outflows.
UK PMIs at 9:30 BST are also in focus this morning.
I am short EUR/GBP, looking for a break of the major 0.8600/10 area.
Levels:
EUR/GBP support: 0.8600/10
Cable downside: 1.3160/70
Cable topside: 1.3300
Trade bias: Short EUR/GBP.
Target/trigger: Break of 0.8600/10.
Cable range: 1.3160/70–1.3300.
Political risk: Miliband as Chancellor would be GBP-negative.
Risk: Leadership contest forces Burnham leftward.
JPY: Short USD/JPY Again as 162 Risk Builds
USD/JPY is getting more interesting.
Nervousness around 162 is growing on all sides.
Yesterday felt like another rate check. But the continued plunges and recoveries raised eyebrows until news filtered through of an emergency meeting between Katayama and Bessent.
Follow-up headlines this morning included:
Katayama: spoke with Bessent as follow-up to G7 meeting.
Katayama: US and Japan are increasingly aligned on FX policy.
That has quietened the rumour mill.
The market was likely piecing together:
Reduced efficacy of unilateral intervention.
The UST selling required for further intervention.
The possibility of coordinated action.
My view is that Japan cannot afford to let USD/JPY go through 162.
The conditions are ripe for action:
Oil is soft.
Equities are soft.
Rates are calming.
The market is getting shorter and shorter JPY.
Action could come if USD/JPY pops through 162, or potentially even before.
I am not sure the US joins them. But given the signal intervention would send to the rest of the USD complex — and because my portfolio is still a little long USD — I am short USD/JPY once more.
Trade bias: Short USD/JPY.
Key level: 162.
Rationale: Intervention risk rising sharply.
Supportive backdrop: Soft oil, soft equities, calmer rates, JPY shorts.
Risk: No intervention and DXY breakout drives another upside squeeze.
CHF: Still Short, Watching USD/CHF 0.8100
The greenback continues to trend higher this morning.
USD/CHF is now eyeing 0.8100 resistance.
We still think CHF should be a medium-term underperformer and continue to run short CHF for now.
There is not much to add on flows.
The move lower in equities has kept the greenback on the front foot this morning.
We are looking for a close above 0.8100 in USD/CHF today.
Trade bias: Short CHF / long USD/CHF.
Key level: USD/CHF 0.8100.
Signal: Close above 0.8100 would be constructive.
Risk: CHF positioning is rising; risk-off can complicate shorts.
AUD / NZD: AUD/NZD Data Test Ahead
I retain AUD/NZD longs — you all know why.
But the next 24 hours could be pivotal:
Australia May inflation tonight.
Employment data Thursday morning.
I may reassess after the data.
Australian PMIs overnight were slightly better:
Employment intentions higher.
Prices lower.
Short-term trendline support in AUD/NZD comes in around 1.2180.
The 50dma is now around 1.2161.
A close below this zone would require a short-term reassessment.
On the upside, a break of the 2026 high at 1.2290 would further encourage the bullish view.
Both AUD and NZD continue to trade heavy against the USD after last week’s Fed and show no sign of meaningful recovery.
Levels:
NZD/USD: A break of 0.5680 would suggest a move toward 0.5800.
Note: this appears directionally inconsistent as written; if spot is above 0.5680, a break below would normally point lower, not toward 0.5800.AUD/USD: A move below 0.6950, the Fib retracement from the November base, would suggest a move toward 0.6850/60.
Trade bias: Long AUD/NZD, but data-dependent.
Support: 1.2180/1.2161.
Upside trigger: Break of 1.2290.
Reassess: Close below 1.2160/80 zone.
Risk: Soft Australia inflation/jobs undermines AUD RV long.
CAD: CPI Headline Hot, Core Still Benign
Canadian headline CPI rose more than expected to 3.2% YoY.
Consensus was 3.0%, and April was 2.8%.
The increase was driven by gasoline prices hitting a four-year high.
Core measures were subdued:
BoC preferred measures unchanged at 2.1%
Ex-food-and-energy core rose to 1.6%
Energy prices climbed to 22.2% YoY in May, but they have likely peaked given the recent pullback in oil after Middle East de-escalation.
The print had little impact on CAD, which continues trading with broader risk sentiment.
I still think CAD should be a major medium-term underperformer.
I remain short CAD for now.
Trade bias: Short CAD.
CPI: Headline hot, core subdued.
BoC core: 2.1% unchanged.
Driver: Oil pullback means energy CPI likely peaked.
Risk: Sustained oil rebound or sticky core reverses CAD weakness.
SEK / NOK: Core NOK/SEK Long, But Energy Is the Swing Factor
The view remains long NOK/SEK.
Rate differentials are near all-time highs after last week’s central-bank meetings.
But we fully acknowledge that if energy prices continue to fall, NOK will underperform through terms of trade.
That is why position size remains core rather than large.
The view had been that Brent would fall into an $80–85 range after Middle East de-escalation.
That is being challenged after Iran received a 60-day licence to sell oil on the open market.
Still, with continuing hostilities between Israel and Lebanon and what remains, in my opinion, a fragile ceasefire, oil should retain some degree of premium.
Try telling that to energy markets, though.
Brent was again under pressure yesterday, falling more than 5% on the day, yet NOK was stronger.
That was notable.
HF demand for NOK/SEK was in play yesterday.
While positioning is always a concern, internal flows since the start of the year suggest the franchise is now short NOK, led by SHFs and HFs.
That means positioning should be less of a headwind for the view.
A move below 0.9820/30 would be disappointing.
No domestic data today, but Riksbank minutes and the NIER survey will be interesting going forward.
Trade bias: Core long NOK/SEK.
Support: 0.9820/30.
Rationale: Rate differential near all-time highs.
Positioning: Franchise now short NOK, less crowded long risk.
Risk: Brent continues falling and drags NOK lower.
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% and 74% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
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!