Institutional FX Insights: JPMorgan Trading Desk Views 3/6/26
JPM G10 FX Daily
EUR: Dollar Setup Is Improving, But Payrolls Still Loom
I have to admit, things are starting to look reasonably positive for the greenback.
US data continues its solid run. JOLTS was not quite as strong in the details as the headline suggested, but there were no dramas. Meanwhile, global data looks soggy:
Australian GDP missed overnight.
Canada was weak.
Euro PMIs were soft.
UK data has disappointed.
And if you were bored of Iran — where both sides still seem far apart and skirmishes are increasing — our old favourite tariff headlines reappeared overnight too.
So why is the dollar only inching higher when the news flow has been so one-way this week?
Probably because the market wants to see Friday’s payroll print. There is also still an outside chance of a Middle East agreement appearing out of the blue, where people would expect a knee-jerk USD selloff — likely to fade, but still not something to be fully ignored.
The portfolio setup is unchanged:
Long USD versus CHF.
Long USD versus CAD.
Short some USD against MXN.
Looking to resell USD/ZAR toward 16.40.
Looking to resell EUR/HUF closer to 360.
On USD/CHF, watch for a sustained break of the 200dma just above 0.7900.
EUR was fairly stable yesterday until after London went home. It remains in familiar territory, but the longer it fails to rally, the more impatient the market will become.
The prevailing view on Europe is still negative, even in a scenario where Trump and Iran reach some tentative agreement without much in the way of tangible substance.
Flows have been unremarkable this week, which is unsurprising given pitiful ranges. But there has been a clear uptick in demand for EUR downside in options.
Given we have barely moved for two weeks, levels remain the same:
1.1570/80 on the downside.
1.1710 on the topside.
Trade bias: USD-positive, but do not chase pre-payrolls.
EUR/USD downside: 1.1570/80.
EUR/USD topside: 1.1710.
Portfolio: Long USD/CHF, long USD/CAD, short USD/MXN portion.
Re-entry levels: Resell USD/ZAR near 16.40, EUR/HUF near 360.
Risk: Surprise Middle East MOU triggers knee-jerk USD selloff.
GBP: Keep Core EUR/GBP Long, Add USD on Dips
Fresh tariff threats and a ceasefire barely deserving the name have supported the dollar overnight.
It certainly feels like the stars are aligning for the greenback. But with a potential MOU and US labour data still hanging over the market this week, it remains prudent to add USD on dips rather than chase.
A string of strong US employment numbers this week would change that, but until then we continue nursing a core EUR/GBP long.
On the BoE side, Bailey was on the wires yesterday, outlining the case for patience given financial conditions have already tightened.
That contrasted with Greene, who warned that the Bank:
“Can’t rely on the tightened curve alone,”
and argued that:
“The risk of acting is less severe than of failing to act.”
Flows were mixed:
Modest RM and systematic GBP demand.
Offset by corporate GBP supply.
Trade bias: Core long EUR/GBP.
USD bias: Positive, but add on dips rather than chase.
Catalysts: US labour data, possible Middle East MOU.
BoE tone: Bailey patient; Greene hawkish.
GBP flows: Mixed.
JPY / CHF: Full MoF-Testing Mode
USD/JPY edged higher overnight, but 160.00 has capped the move so far.
That said, we are now entering full MoF-testing mode.
Katayama’s recent remarks did not sound especially aggressive, but the market should expect pushback soon. The risk of more concrete action rises if USD/JPY approaches 160.50/162.00.
On CHF, the view is unchanged. We remain bearish and continue to hold CHF shorts, primarily versus:
JPY
USD
AUD
Flows yesterday:
Better JPY supply, mainly from RM and HF accounts.
CHF flows were more contained.
JPY trade bias: Modest long JPY / cautious into 160.
Preferred expression: Short CHF/JPY.
USD/JPY cap so far: 160.00.
Intervention risk zone: 160.50/162.00.
CHF trade bias: Bearish CHF versus JPY, USD and AUD.
AUD / NZD: AUD/NZD Resilience Is Encouraging
Australian Q1 GDP came in below expectations at 0.3%.
That saw AUD underperform on crosses — but interestingly, not against NZD. AUD/NZD bounced around 40 points off the lows.
Regular readers will know I had started rebuilding longs in AUD/NZD. While the overnight data should have weighed more heavily on the cross, the price action is encouraging and supports the view outlined over the past two days.
If AUD/NZD can close above the 50dma around 1.2134, that would suggest further gains toward the recent highs just below 1.2300.
Trade bias: Long AUD/NZD rebuilt.
Key technical: Close above 50dma near 1.2134.
Target: Recent highs just below 1.2300.
Data: Australia Q1 GDP missed at 0.3%.
Encouraging signal: Cross bounced despite weak domestic data.
CAD: Structural Weakness Still Wins
I remain bearish on the Canadian economy medium term.
The BoC will likely need to remain on hold for the foreseeable future, and I continue to run short CAD, looking for a move in USD/CAD back toward the YTD highs around 1.3950.
CAD can feel frustrating. It often fails to react meaningfully to the data. But looking at price action over the past month, USD/CAD has slowly but surely continued to grind higher.
I have also been running CAD shorts against AUD longs.
Parity in AUD/CAD will be a hard level to break, but I still remain bullish medium term. That said, it makes sense to be tactical here:
Reduce on spikes.
Add on major weakness.
Trade bias: Short CAD.
USD/CAD target: YTD highs around 1.3950.
Cross view: Long AUD/CAD medium term.
AUD/CAD parity: Likely sticky, but still target over time.
Tactical plan: Reduce on spikes, add on meaningful dips.
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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!