Institutional FX Insights: JPMorgan Trading Desk Views 28/4/26
JPM G10 FX
G10 FX remains choppy and headline-driven, with daily price action increasingly difficult to reconcile with macro fundamentals. Volumes suggest investor fatigue with the constant back-and-forth, and conviction remains low while markets attempt to look through the geopolitical and energy shock. The broader bias still leans toward being short USD overall, but patience is warranted given erratic intraday moves and the potential for month-end flows to create better entry levels.
Preferred expressions remain selective: trading around a core EUR/HUF short, looking to buy GBP dips if UK political risk clears, revisiting CAD longs tactically, and using any data-driven AUD weakness as an opportunity rather than chasing ahead of tonight’s CPI print.
EUR — Rangebound, Noisy, and Still Vulnerable on Crosses
There is little new in the euro story, but price action remains inconsistent. Oil was higher yesterday and EUR rallied; oil is higher again today and EUR is lower. The more durable point is that Eurozone data have been poor, with economic surprises still deeply negative versus peers. That keeps investors comfortable holding EUR shorts on the crosses, even if EUR/USD itself remains rangebound until there is clearer geopolitical resolution.
The pair is again testing the 200-day moving average near 1.1677. A close below that level would likely invite fresh momentum selling, though corporate demand has previously helped cushion dips. For now, EUR/USD remains more of a tactical range trade than a clean directional expression.
GBP — Political Risk Today, But Dip Still Looks Buyable
Sterling faces an important political test, with evidence from Barton and McSweeney before the Foreign Affairs Committee and a Commons vote later on whether Starmer should be referred to the Privileges Committee over whether he misled Parliament.
The base case remains that Starmer survives. Labour’s majority should be sufficient, and any potential successors are unlikely to want ownership of the issue ahead of local elections. Political betting markets have remained relatively stable, suggesting limited incremental panic. Aside from a brief wobble on yesterday’s vote headline, sterling markets have not materially repriced the risk.
That leaves GBP looking more attractive on dips, especially into what could be a supportive month-end period. The preference is to buy cable weakness, barring a clear political smoking gun. Key ranges remain:
EUR/GBP: 0.8600–0.8680
GBP/USD: 1.3400–1.3600
Flows were largely uneventful yesterday, though discretionary hedge funds broke a four-day GBP buying streak.
JPY — Hawkish Vote, Dovish Press Conference
The BOJ decision was more interesting than expected at the vote level, with March’s 8-1 split shifting to 6-3 in April. On its own, that looked hawkish and initially supported JPY. However, Governor Ueda’s press conference quickly diluted the signal.
Ueda remained non-committal, emphasizing downside risks to growth even as inflation forecasts moved higher. His key messages were:
The likelihood of the outlook being met has fallen materially for now.
The BOJ cannot specify how many months it will take to judge the timing of the next hike.
A hike remains possible if the economic outlook improves.
The result is that the market is unlikely to price materially more than the current 18bp for June. JPY therefore remains highly dependent on the Iran/energy/geopolitical outcome. The tactical strategy has been to buy USD/JPY after the press conference, with a view to reducing exposure into a test of 160. Hedge funds have also been seen buying USD/JPY.
CHF — Still a Potential Funder, But Hard to Engage Yet
The franc is softer this morning as the broader dollar rally lifts USD/CHF and drags EUR/CHF higher. There is a growing argument for using CHF as a funding currency, but the current geopolitical backdrop makes that harder to implement with conviction.
The tactical CHF/JPY short has worked well after selling near 204, and profits have been taken following the BOJ’s 6-3 vote and Ueda’s lack of urgency. Flow-wise, real money has now sold CHF for nine consecutive sessions, while systematics have been CHF buyers over recent days and continue to add to longs.
AUD — Long Bias, But CPI Is the Near-Term Catalyst
The core view remains long AUD, especially versus EUR. Tonight’s Q1 CPI print is the key near-term event.
The bar is high for an inflation print that forces the rates market to price substantially more RBA tightening, with around 54bp already priced by year-end. Still, a firm print should lift pricing for next week’s meeting from roughly 19bp toward 25bp, reinforcing AUD’s positive carry appeal in a week where most major central banks are expected to remain on hold.
A soft print would give the RBA more time to assess the impact of the Middle East conflict and likely turn next week’s meeting into more of a coin toss. The preference is not to chase AUD ahead of CPI, but to use any data-driven dip as a buying opportunity if the broader carry story remains intact.
NOK — Still Long, Positioning Not Yet Stretched
The view remains constructive on NOK. Positioning does not appear to be a major constraint: using “liberation day” as the starting point, internal flow data suggest hedge funds and real money are broadly flat, while short-horizon funds remain near 12-month shorts.
That means the NOK long is not obviously crowded, even if that feels somewhat counterintuitive given the oil move. NOK may come under pressure when the Strait of Hormuz eventually reopens, but that would likely be a better opportunity to add rather than a reason to abandon the position.
CAD — Strength Looks Flow-Driven, Not Structural
There has been increased client interest in CAD, particularly around whether the sovereign wealth fund announcement or potential M&A flows are supporting the currency. However, CAD strength has not been universal: AUD/CAD and NZD/CAD both moved higher, suggesting the move lower in USD/CAD was more likely driven by large systematic supply.
Short-horizon funds have now bought CAD for 11 consecutive sessions, helping push USD/CAD onto the 1.35 handle. Strategically, the sovereign wealth fund story is not seen as a game changer given the complicated funding path. The bias therefore remains to be short CAD on the crosses, while recognizing that near-term systematic flows can keep USD/CAD heavy.
Hedge funds and real money were both CAD sellers yesterday, with real money extending its selling streak to five sessions.
Bottom Line
The FX market remains noisy and inconsistent, with low conviction and heavy headline dependence. The cleanest themes are:
Stay selectively short USD, but avoid chasing.
Buy GBP dips if Starmer clears today’s political risk.
Treat EUR as vulnerable on crosses, while EUR/USD remains rangebound.
Fade JPY strength after Ueda’s non-committal tone, with USD/JPY still drawn toward 160.
Maintain long AUD bias, but let CPI provide the entry point.
Stay constructive NOK, especially on any reopening-related dip.
Be cautious on CAD strength, which appears more flow-driven than structurally justified.
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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!