JPM G10 FX Daily

EUR: Consolidation Makes Sense, But USD Upside Can Reignite

There is little inspiration today.

Friday’s price action was random overall, and we are now in the month-end zone for the next couple of sessions.

I had felt the dollar was a little stretched given moves in yields and oil.

Our positioning monitor over the weekend showed demand for dollar topside was the largest in a week for two years, so it is not a surprise to see some consolidation.

That said, this is a new era of no forward guidance.

That means the market can run away with its imagination.

A strong payrolls print on Thursday can certainly reignite further USD extension.

So having moved more neutral last week, I am now looking for areas to add back dollar length again into the print.

Aside from the labour market, this week’s ECB Sintra conference will be in focus.

Central-bank policy questions are everywhere.

Warsh is also appearing, although I am sure he will not want to give much away.

Risk: Re-Adding USD Length Selectively

I dipped my toe back into EUR shorts on Friday as we moved into the lower end of the first resistance zone.

I am looking to add a bit more toward 1.1450.

I am still running USD/CHF longs via options.

On the other side, I have some GBP length, which survived a strange fast-money battering on Friday out of nowhere.

If cable gets closer to 1.3300, and if Burnham’s speeches avoid fireworks, I would look to take the tactical long off.

In EM, I am sticking with ZAR and HUF longs, which seem to have overcome the worst of the move for now.

EUR/USD: Fade Rallies Into 1.1450 and 1.1480/90

Sintra will help determine the extent of ECB hawkishness heading into the July meeting.

For now, the dogs appear to have been called off until September.

There has been some relief for EUR as corporate interest waned late last week.

We also saw a double failure below the Fibonacci support I highlighted at 1.1340, although EUR/USD did manage a weekly close below 1.1400.

With lower oil and ECB hawkishness retracting, it makes sense that EUR has found some relief.

But ultimately, on a relative basis, EUR is fighting on both:

• Growth

• Yield

Weekend headlines about VW job cuts do not help the broader economic mood.

Therefore, I am looking to fade rallies from here.

I sold a tiny amount into 1.1430 on Friday, which was the lower end of the first resistance zone at 1.1430/50.

I would add more early this week at:

• 1.1450

• 1.1480/90, a good hourly pivot

If we do not get those levels, I would bite the bullet and add on a strong payrolls print.

Trade bias: Short EUR/USD on rallies.
Sold: Small at 1.1430.
Add levels: 1.1450, then 1.1480/90.
Support: 1.1340 Fibonacci area; weekly close below 1.1400.
Catalysts: Sintra, Warsh, payrolls.
Risk: Soft payrolls plus less-hawkish Sintra squeezes EUR higher.

GBP: Square, Waiting for Burnham and the Cross Break

Friday’s price action was odd.

Gilts and GBP lurched lower mid-afternoon, ostensibly on reports that Cooper was calling for more defence spending.

This came after markets largely ignored a sharp rise in the odds of Miliband replacing Reeves earlier in the day.

We saw strong discretionary hedge-fund participation in EUR/GBP, reversing last week’s chase into 0.8600/10 support.

Despite this being my tactical view, I did not make the most of it due to the delayed fuse for the move.

I am now square.

Politics: Miliband Risk Rising, But Market Unfazed

Miliband has risen further on Polymarket, but sterling markets have settled and seem unfazed.

There are opposing views on how bad “Red Ed” would actually be.

James Nelligan in Strategy is less worried, and I read an interesting Guardian article this morning pouring cold water on the fears.

It sounds like we should focus more on Burnham’s actual plans.

We will hear from Burnham around 11:30 BST this morning.

Otherwise, we look forward to Sintra on Tuesday, where Bailey is due to speak.

We still also have to navigate month-end, which is expected to be a USD buy.

Key levels:

• Cable support: 1.3145/65

• Cable resistance: 1.3300/20

• EUR/GBP range: 0.8600/0.8700

Trade bias: Square GBP.
Cable range: 1.3145/65–1.3300/20.
EUR/GBP range: 0.8600/0.8700.
Catalysts: Burnham speech, Bailey at Sintra, month-end USD demand.
Risk: Miliband Chancellor headlines hit gilts and GBP.

JPY: Small Short USD/JPY, But This Is an MoF Trade

There has been more Middle East back and forth, but it seems we now have another ceasefire within a ceasefire.

We move on.

There is little to add on JPY.

The recent Nikkei bounce is leading to some fears — or hopes — that JPY will remain very heavy into tomorrow.

I am happy to remain small short USD/JPY against USD longs elsewhere.

I am on high alert for MoF.

For the avoidance of doubt, I am not a JPY bull.

Any MoF-driven move should be faded with both hands.

Otherwise, we have the long-awaited GPIF annual report on Friday.

It is widely expected to show unchanged asset allocation for the 2026/27 fiscal year.

Could GPIF be involved in Takaichi’s new 10-year investment plans?

The JPY370trn figure is the total of public and private-sector investment, so it is not out of the realms of possibility.

Stay tuned.

Trade bias: Small short USD/JPY as hedge.
MoF: High alert; fade intervention-driven JPY strength.
GPIF: Annual report due Friday; unchanged allocation expected.
Risk: USD-positive month-end forces USD/JPY through key levels before MoF acts.

CHF: Reduced USD/CHF, Buy Dips Toward 0.8000

No clear direction for USD over the past two sessions.

Month-end clouds the picture, and we await important US data on Friday.

We have reduced USD/CHF longs up here.

However, we would look to buy dips toward 0.8000.

Last week, we saw CHF demand from both:

• Systematics

• Real money

Locally, focus will be on Swiss inflation data on Friday.

Trade bias: Reduced long USD/CHF; buy dips.
Buy zone: Toward 0.8000.
Catalysts: US data Friday; Swiss inflation Friday.
Flow: CHF demand from systematics and RM.
Risk: Soft US data or risk-off supports CHF.

AUD / NZD: Event Risk Heavy, But AUD Dip-Buying Setup Emerging

There is a lot of USD event risk this week, so I am close to home in both AUD and NZD.

The sequence is:

• Month-end tomorrow

• Warsh at Sintra on Wednesday

• US NFP on Thursday

Technically, both AUD and NZD are oversold on RSI.

AUD is more interesting because it is approaching its 200dma around 0.6861.

AUD longs since the start of the year have also been dramatically reduced.

There are many hurdles this week, but I will look to tactically buy AUD on any dip toward 0.6861 over the next two days.

Flexibility will be key into NFP.

Trade bias: Tactical AUD dip-buying only.
AUD/USD buy zone: Near 0.6861 200dma.
Positioning: AUD longs sharply reduced.
Catalysts: Month-end, Warsh, NFP.
Risk: Strong US data triggers broader USD extension.

CAD: Bearish Medium Term, Canada GDP Next

USD/CAD moved aggressively lower on Thursday after the PCE print.

On Friday, the pair traded mostly sideways despite the desk seeing better supply, mainly from:

• Real money

• Systematic accounts

Nevertheless, Canadian fundamentals remain weak.

With oil well off the highs, CAD should continue to underperform over the medium term.

Focus for Canada now turns to tomorrow’s GDP print.

Trade bias: Medium-term short CAD.
Catalyst: Canada GDP tomorrow.
Driver: Weak Canada fundamentals and lower oil.
Risk: Strong GDP or oil rebound supports CAD.

SEK / NOK: Tactically Selling EUR/NOK Into Resistance

The fragile ceasefire broke over the weekend after the US retaliated to Iran’s drone attack on a Singaporean vessel.

But both sides have now ceased hostilities and will continue negotiations.

So we can all rest easy again.

Sometimes, you just have to admit you got it wrong. That applies to my assessment of oil and therefore NOK after the MOU prompted the Middle East ceasefire.

The medium-term story still points to lower oil:

• Energy transition

• Higher supply

But near-term dynamics — inventory rebuild and demand strength — have not played out as expected.

I had thought that would be a Q3/Q4 event.

Regular readers know I cut the last of my NOK/SEK longs last week and admitted defeat.

But if lower oil means fewer rate hikes and a better global growth outlook, and Norway still enjoys positive carry, NOK should become attractive again at some point.

No doubt you are all rolling your eyes.

But there are reasons to tactically sell EUR/NOK here:

• Real money bought NOK after seven straight days of selling.

• Short-term hedge funds have bought NOK for four days.

• RSIs are in overbought territory.

• EUR/NOK is approaching strong resistance at 11.35/11.38.

So I have tactically started selling the cross.

We still have to get through month/quarter/half-year-end rebalancing.

Given oil stocks have massively underperformed, logic suggests NOK demand. But I make no prediction about what will actually happen.

A move above 11.40 would be disappointing.

Tomorrow’s Norges Bank FX purchases could be interesting.

The belief was that higher energy prices would eventually push Norges Bank toward selling NOK.

But with Brent more than 20% lower than last month, how they assess the outlook will matter.

Trade bias: Tactical short EUR/NOK.
Sell zone: 11.35/11.38.
Stop/disappointment: Above 11.40.
Flow: RM and SHF have turned NOK buyers.
Catalyst: Norges FX purchases tomorrow.
Risk: Oil keeps falling or month-end flows overwhelm the setup.