Institutional FX Insights: JPMorgan Trading Desk Views 29/4/26
G10 FX Daily
J.P. Morgan | Sales & Trading
Markets remain caught between a very heavy event calendar — Fed, ECB, BoE, BoC, German CPI, month-end rebalancing — and a lack of conviction. Directionally, G10 FX remains difficult: ranges are tight but choppy, participation is patchy, and investors are reluctant to commit while political and geopolitical risks remain unresolved.
The cleaner expressions remain relative-value and carry trades, rather than outright USD direction. We continue to prefer:
Long GBP/USD into the BoE and supportive month-end dynamics.
Long AUD on crosses, with dips to be faded given RBA pricing, carry advantage, and local hedging flows.
Short EUR/HUF as a cleaner cross-market expression.
Potential tactical short USD/JPY into GPIF results, but only with tight risk given proximity to intervention-sensitive levels.
CHF as a possible funder, though geopolitical risk argues for patience.
EUR
You would think that with everything due over the next 24 hours — Fed, ECB, BoE, BoC and month-end — the market would be salivating at the opportunity set. Instead, direction remains tricky. There is some participation in carry while we sit in tight but choppy ranges, but otherwise investors are struggling to be fully committed, understandably.
Tonight is Chair Powell’s final scheduled Fed meeting. It is hard to see why the market would react aggressively to much he says, even if the message is overtly hawkish, given the perceived shift coming from a Trump-installed Warsh. That said, the case for cuts has continued to weaken in recent weeks, while breakevens remain very low across the board.
We remain short EUR/HUF. I also bought some GBP/USD this morning following Starmer’s survival yesterday and ahead of the BoE tomorrow. I may optionalise the position to protect against next week’s local elections, but if no leadership challenge emerges, the direction of travel for GBP still feels higher.
There is not much to say on EUR itself given the lack of movement and lack of client engagement. There was no obvious signal from corporate flows into month-end yesterday. EUR/USD remains stuck, and most investors appear disinterested versus the dollar. There is still interest in being short EUR somewhere on a cross basis, particularly as a funder.
German inflation is due today, if anyone cares. Frankly, the narrative remains hard to pin down: some days EUR is treated as an anti-dollar; other days the Eurozone economy is supposedly on the brink of collapse. Take your pick.
EUR Trading Takeaway
EUR/USD: No strong directional signal; stay tactical and avoid chasing range breaks without confirmation.
Preferred EUR expression: Remain short EUR on crosses, especially where carry or relative policy divergence is cleaner.
Current position: Maintain short EUR/HUF.
Event risk: German CPI and ECB may add noise, but conviction remains low unless EUR breaks decisively out of recent ranges.
GBP
As expected, Starmer survived another “Super Tuesday”, with McSweeney shouldering the blame while Labour backbenchers coalesced to vote down the Commons motion with ease. He is safe for now, though this circus may still hurt Labour at the local elections. The opposition narrative of a party-wide cover-up is politically irresistible.
That said, the timing of any succession remains too murky to trade at this stage. On the contrary, we have been buying this dip in GBP/USD, given the powerful dynamic from last week’s data heading into tomorrow’s BoE meeting, where very little is priced. The Times shadow MPC voted 5-4 for a hold, which reinforces the idea that the market is underpricing the risk of a less dovish BoE outcome.
Month-end rebalancing could also provide a potent boost for GBP.
We are long cable here. Key levels: 1.3380 support, 1.3600 resistance.
Flow-wise, GBP was the top-bought currency for DHF, continuing the recent reduction trend, having been bought in five of the last six sessions. This was offset by 2z SHF GBP supply, with SHF accounts now having sold GBP for four sessions in a row.
GBP Trading Takeaway
Bias: Constructive GBP.
Trade: Long GBP/USD.
Entry zone: Current levels / dips toward 1.3380.
Support: 1.3380.
Resistance / target: 1.3600.
Risk: Local election headlines and any renewed leadership speculation.
Optionality: Consider protecting longs into next week’s local elections if political noise picks up.
Core view: If Starmer avoids a leadership challenge and the BoE is not dovish, GBP should remain supported.
JPY
Yesterday’s BoJ press conference produced a fairly standard reaction function, though the market response was muted given poor engagement and proximity to 160 in USD/JPY. We cut tactical USD/JPY longs and move on.
The next thing to watch for JPY, aside from month-end, is the GPIF fiscal-year results, due Friday. I still expect this to be the nail in the coffin for my long-held view that it makes too much sense for the government not to enact a portfolio shift. Recent noises have pointed in that direction, but let us see the confirmation.
From a risk-reward perspective, given current levels, it may make sense to sit short a little USD/JPY just in case going into the GPIF release — cue groans from any remaining readers.
JPY Trading Takeaway
Bias: Tactical downside risk in USD/JPY near current elevated levels.
Trade: Light tactical short USD/JPY into GPIF results.
Rationale: Positioning, proximity to 160, intervention sensitivity, and potential portfolio-shift headlines.
Risk: Month-end flows, broad USD strength, or GPIF disappointment.
Positioning: Keep size small and risk tight; this is a tactical trade, not a high-conviction structural short.
CHF
USD/CHF pushed higher yesterday amid large systematic supply of CHF and further drawdowns in gold. The Middle East situation remains fluid, leaving USD/CHF stuck in the 0.78–0.80 range.
As discussed yesterday, we are considering using CHF as a funder, but are struggling to pull the trigger given the geopolitical backdrop. We remain flat for now after taking profit on tactical CHF/JPY shorts yesterday.
CHF Trading Takeaway
Bias: CHF could work as a funder, but geopolitical risk argues for caution.
USD/CHF range: 0.7800–0.8000.
Positioning: Flat for now.
Potential trade: Use CHF as a funding currency only if Middle East risk premium fades further.
Risk: Any renewed geopolitical escalation could quickly revive CHF demand.
AUD / NZD
There was no smoking gun in the Australian inflation print for the RBA next week, with trimmed mean CPI printing one-tenth below expectations. The details were benign, while the rises were driven by goods and energy. Our economists still expect the RBA to hike next week.
Market pricing has moved slightly lower to around 18bp for next week, while the terminal rate moved approximately 8bp lower. The bottom line is that with the RBA likely to hike to 4.35% next week, and with AUD maintaining its position as the highest yielder in G10, long AUD on crosses remains my favourite trade.
Add to this indications of further currency hedging from local pension funds, and any AUD sell-off should be faded.
Tonight is Powell’s last scheduled meeting as Fed Chair, where the FOMC is expected to leave rates unchanged. The outlook remains uncertain due to the Middle East conflict, and the statement should reflect this, likely producing few fireworks. If there is any surprise, it may come from better US data tilting the meeting slightly more hawkish. However, any move lower in AUD/USD on the back of this should be bought.
Tomorrow is month-end. While I make no firm prediction on the exact flow impact, any AUD weakness should again be faded.
AUD / NZD Trading Takeaway
Bias: Strongly constructive AUD, especially on crosses.
Preferred expression: Long AUD crosses rather than outright AUD/USD if USD event risk remains noisy.
AUD/USD: Buy dips, especially into the low 0.71 handle if seen.
Rationale:
RBA still likely to hike.
AUD remains the highest yielder in G10.
Inflation data was not weak enough to derail the RBA.
Local pension fund hedging flows may support AUD.
Any Fed-driven dip should be faded unless the USD reaction is disorderly.
Risk: A materially hawkish Fed, risk-off escalation in the Middle East, or a surprise dovish shift from the RBA.
Core trade: Stay long AUD on crosses and use dips to add.
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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!