Institutional FX Insights: JPMorgan Trading Desk Views 9/6/26
JPM G10 FX Daily
## EUR: USD in G10, EM Carry on the Other Side
A few things are on my mind this morning.
First, the Middle East. It is clear Trump does not want to re-escalate, given how quickly he criticised Israel’s unilateral actions yesterday.
Second, rates pricing. Two Fed hikes and three ECB hikes already look like high bars to out-hawk.
Third, growth. Listening to Bruce and Joe post-payrolls, they are back to sounding reasonably upbeat.
So where does that leave the view?
If things can calm down, we should be in a solid growth environment with some degree of US outperformance.
That translates into a portfolio where I keep some G10 USD length, especially versus CHF, and look to buy USD/CAD dips if the BoC sounds more measured this week. I do not want to touch EUR until we are past the ECB.
On the other side, I prefer selling USD rallies versus EM currencies, which aligns with our strategists’ positive recommendations last night. I hold ZAR and MXN here, and remain patient for better levels in HUF.
I also cut the remainder of the post-payroll hit-and-run AUD shorts.
EUR is taking a breather after what I thought was a slightly larger post-payroll move than expected as we head into this week’s ECB meeting.
As above, sounding hawkish versus a market already pricing three ECB hikes will take some doing. But the risk is that Lagarde sounds more urgent on front-loading, with July priced at only 10bp right now.
That is why I am not chasing EUR lower yet and have expressed USD length elsewhere.
Selling a EUR rally still makes sense. The rotation story has seemingly faded, and the Eurozone economy should remain a relative laggard. But the stop needs to be above 1.1700 in my mind.
That makes 1.1590/1.1610 — the first area where we paused last Friday — the ideal first sell zone if that is your view.
If EUR/USD breaks lower, key support is around 1.1400, with this year’s low at 1.1411 and last August’s low at 1.1392.
Trade bias: Do not chase EUR lower into ECB; sell rallies.
**Ideal sell zone:** 1.1590/1.1610.
Stop: Above 1.1700.
**Downside support:** 1.1400/1.1410.
Portfolio: Long USD/CHF; look to buy USD/CAD dips; long ZAR/MXN versus USD rallies.
Risk: Lagarde sounds urgent on front-loading and EUR squeezes.
---
## GBP: Core EUR/GBP Long Still Makes Sense
After being spoiled by Friday’s more impulsive move in G10, things quietened significantly yesterday as Iran-Israel exchanges ceased.
Trump is still saying we are on the verge of the MOU, but this merry-go-round feels like it can continue into the summer.
It is hard to see much happening today ahead of tomorrow’s important US inflation data, which will further shape expectations into Warsh’s first Fed meeting.
No change in stance: carry can do well into the summer, so it makes sense to cross up G10 USD longs with selected EM in coming sessions.
Sterling remains quiet, but another Brexit — or “Bre-entry” — poll caught my eye. This one was from Ipsos, with a more positively framed question, and found 52% would vote to rejoin. I promise not to report every poll going forward, but did not want to be accused of cherry-picking.
For now, this is not setting the world alight, but long EUR/GBP still makes sense.
Flows:
- SHF continue to sell GBP.
- They are now on a four-day selling streak after the breakneck rebuild of longs earlier this month.
- Net flows elsewhere were negligible.
Levels:
- Cable support: 1.3300
- Cable resistance/upper zone: 1.3370/80
- EUR/GBP range: 0.8600/0.8700
Trade bias: Long EUR/GBP.
**EUR/GBP range:** 0.8600/0.8700.
**Cable support:** 1.3300.
**Cable upper zone:** 1.3370/80.
Flow note: SHF GBP selling streak at four sessions.
Risk: USD CPI disappointment lifts cable mechanically.
---
## JPY: No Need to Wade Back In Yet
BoJ headlines were the overnight focus.
The Nikkei reported that the BoJ will hike in June, which is not a great surprise. More interesting was the suggestion that the BoJ will discuss halting QT from April next year in response to market dynamics. That would be more dovish than our forecast.
There had already been plenty of speculation around this. The real question is whether Ueda can sound hawkish enough on the forward hike path to balance it out.
Since June is basically fully priced, a not-hawkish-enough Ueda could introduce more downside risk for JPY.
I recently got out of JPY longs and see no reason to wade back in right now.
I still think the MoF needs to see disorderly moves before getting involved.
Flows yesterday:
- HF bought JPY around 1z.
- Offshore real money partly offset that.
Trade bias: Neutral / sidelined JPY.
BoJ: June hike largely priced.
QT risk: Possible halt from April 2027 is dovish.
MoF: More likely to act on disorderly moves than levels alone.
Risk: Ueda underwhelms and JPY weakens.
---
## CHF: Bearish, But Shifted Away From Pure USD/CHF
We remain bearish CHF, though the move higher in USD/CHF has prompted some profit-taking as the broader USD rally has paused.
I now hold most CHF shorts against AUD and EUR, because CHF should weaken in a reflationary backdrop.
The flow picture is encouraging:
- Systematics sold CHF for the seventh day in a row.
- They are reducing the longs built since Liberation Day.
- Hedge funds have been CHF buyers, presumably taking profit in a similar way to us.
Tactically:
- Reload USD/CHF near 0.7900/10.
- Buy AUD/CHF near 0.5600.
Trade bias: Short CHF.
Current expressions: Long AUD/CHF and EUR/CHF; reload USD/CHF lower.
**USD/CHF reload zone:** 0.7900/10.
**AUD/CHF buy zone:** 0.5600.
Flow note: Systematics have sold CHF seven days running.
Risk: Renewed geopolitical risk revives CHF haven demand.
---
## AUD / NZD: Rebuild AUD Crosses, But Be Tactical Around CPI
Today should be quiet, apart from random Middle East headlines, as markets wait for tomorrow’s US CPI.
Overnight data showed:
- Australian sentiment a little weaker.
- New Zealand Q1 activity rebounded.
Neither had any meaningful immediate impact. Any link to the AUD/NZD fall looks coincidental and came well after the releases.
I have tentatively started rebuilding AUD longs on crosses, primarily against CHF.
That said, AUD/USD’s two-day close below the 100dma around 0.7077 is a little unnerving.
So while I still like the broader trade, I will trade tactically around tomorrow’s US inflation print, which could hit sentiment, equities and high beta.
Trade bias: Rebuilding AUD longs on crosses, especially AUD/CHF.
AUD/USD technical concern: Two-day close below 100dma near 0.7077.
Catalyst: US CPI tomorrow.
Risk: Hot CPI hurts risk/high beta.
---
## CAD: Bearish Medium Term, But Trimmed Some
USD/CAD traded largely sideways near recent highs yesterday.
CAD modestly underperformed on crosses, even though the desk saw better demand from hedge funds.
No change in medium-term view: I remain bearish CAD.
That said, I trimmed some exposure after Friday’s payrolls print.
The plan is to buy USD/CAD dips if the BoC sounds more measured this week.
Trade bias: Medium-term short CAD, tactically trimmed.
Trigger to add: Measured BoC this week / USD-CAD dips.
Macro view: Canadian weakness persists.
Risk: BoC surprises hawkish or risk sentiment improves.
---
## SEK / NOK: Wait for Tomorrow’s Data Before Re-Buying NOK/SEK
NOK/SEK unwinding was the theme yesterday, with SHF notable NOK sellers on the day, at a -3.07 z-score.
This is worth watching, especially if EUR/NOK closes above the 50dma around 10.9246.
I will not make any rash decisions today. Tomorrow brings:
- Norway inflation
- Sweden household consumption
I want that data before deciding whether the time is right to re-buy NOK/SEK, which is also approaching its 50dma around 0.9940.
EUR/NOK has now rallied for 12 consecutive days. Perhaps some Middle East resolution is already partly priced. With RSI nearing overbought territory, the technical setup is becoming interesting for a correction.
But patience is still best ahead of tomorrow’s data. Ideally, it confirms the NOK/SEK long bias I have held for some time.
A soft Norway inflation print would require short-term reassessment.
Trade bias: Patient; looking to re-buy NOK/SEK if data supports.
NOK/SEK level: Near 50dma around 0.9940.
EUR/NOK 50dma: Around 10.9246.
Catalysts: Norway CPI and Sweden household consumption tomorrow.
Risk: Soft Norway CPI undermines NOK/SEK long bias.
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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!