Institutional FX Insights: JPMorgan trading Desk Views 19/3/26
19 March JPM G10 FX note shifts back toward a more defensive USD-supportive tone after three developments hit together:
higher US PPI
renewed Middle East escalation
a slightly hawkish Powell
That combination helped lift the dollar and reduced the market’s willingness to fade geopolitical risk. The big message is that central banks are largely in wait-and-see mode, while FX remains dominated by oil, conflict headlines, and inflation uncertainty. The desk’s emphasis is again on flexibility, modest sizing, and not overstretching conviction.
Compared with the prior day, the key updates are:
USD tone is a bit firmer again
JPY view improved after a more hawkish-than-feared Ueda
CAD bearish view remains intact
AUDNZD longs are still held, but reduced and more cautious
NOKSEK longs have been largely taken profit on, though the strategist is willing to re-enter if macro inputs improve
So the broad stance is: own some defensive expressions, stay nimble, avoid oversized risk, and let event risk guide positioning.
What changed vs the earlier notes
There are a few meaningful changes in emphasis.
1. USD support has returned
The note says the desk is now more balanced on USD, but in effect the macro tone is more supportive for the dollar than it was in the previous “relief rally” note. Higher US inflation data and Powell’s tone reduce the chance of near-term Fed easing, while geopolitical escalation keeps demand for safety alive.
2. JPY got a better policy impulse
This is probably the biggest positive change in the note. Ueda was more hawkish than feared, which keeps April tightening risk alive and supports the yen narrative. The desk actually added a bit to USDJPY shorts.
3. NOKSEK conviction has been monetized
Earlier notes liked long NOKSEK strongly. Now the strategist says the cross has become overbought and somewhat rich versus relative value models, so they have taken profit on the last of the cash position, though they may re-enter if new data and energy move in the right direction.
4. EUR and GBP are not high-conviction battlegrounds today
The note is less focused on aggressive EUR or GBP directional positions and more on reacting to ECB/BoE messaging. There is still a modest EURGBP long, but conviction is not high.
Currency-by-currency interpretation
EUR
The euro remains a currency with limited upside conviction. The note frames the ECB as likely to sound similar to the Fed: cautious, watchful, and unwilling to commit strongly while geopolitical uncertainty is high.
The important question for the desk is whether Lagarde still says rates are in a “good place”, and how she reacts to market pricing for roughly 53 bps of hikes in 2026. But the message is clear: even a somewhat hawkish ECB probably does not offer much lasting support to EUR if the broader Middle East situation remains unstable and energy risk continues to threaten European growth.
Practical takeaway
Do not assume hawkish ECB rhetoric automatically means EUR up.
EUR remains more of a fragile currency in this macro regime.
No strong fresh EUR trade is being pushed here.
GBP
The GBP section is more nuanced. The desk had been more confidently bearish GBP before, but today’s tone is less combative. UK employment data were mixed, and with the BoE ahead, the strategist does not want to “pick a fight” aggressively.
They keep a modest long EURGBP, but say they would stop out / give up on that view through 0.86.
For cable, they highlight:
1.3180 to 1.3200 as a major pivot/support area
1.3300 to 1.3310 as resistance
1.34 as the next higher resistance zone
Practical takeaway
GBP bearishness is still present, but with lower aggression
Preferred expression remains modest EURGBP long
Key invalidation is below 0.86
In cable, rallies into resistance are still suspect, but the desk is not pressing hard today
JPY
JPY is one of the clearest positive stories in the note.
Ueda was seen as more hawkish than feared, which matters because the market was worried the BOJ might back away from tightening because of geopolitical uncertainty. Instead, he emphasized that FX and oil could matter more for inflation than previously thought. That keeps the possibility of an April move alive.
The desk says they have topped up USDJPY shorts a touch, though still modestly.
Key levels:
USDJPY: 158 to 160
EURJPY 100d: 182.37
CHFJPY 50d: 200.56
Practical takeaway
JPY is one of the stronger tactical views here
The desk prefers being short USDJPY, but not in oversized fashion
If BOJ hawkishness persists and global risk worsens, JPY has room to perform better
CHF
CHF remains a sideline trade for them.
Despite the stronger geopolitical backdrop, they still do not see enough edge to engage. The SNB held rates unchanged and reaffirmed a readiness to intervene, but this does not materially change the desk’s neutral stance.
Practical takeaway
No high-conviction CHF trade
Stay flat unless the geopolitical picture shifts more decisively
AUD / NZD
The desk still likes AUDNZD longs, but with reduced size and more caution.
What is notable is that the market ignored weak NZ GDP and soft Australian employment overnight, which tells you macro releases are currently being overwhelmed by broader geopolitical/oil dynamics.
The structural support for AUDNZD remains:
terms of trade
dividend demand
relative support for AUD over NZD
But if geopolitical stress intensifies, AUD could also suffer from deleveraging, so the desk is more careful now.
Practical takeaway
Bias remains long AUDNZD
But this is a reduced, not full-size, expression
More escalation in the Middle East could hurt risk-sensitive AUD positioning
CAD
The CAD view remains bearish, and this is still one of the more stable convictions in the note.
The BOC held as expected. The important nuance was a change in language: instead of saying the current rate is appropriate, they now say they stand ready to respond as needed. The press conference was balanced, but the central bank is clearly in wait-and-see mode because growth risks and inflation risks are pulling in opposite directions.
The desk says the move in USDCAD was mostly driven by broader USD strength, but importantly, they also saw better real-money demand for USDCAD.
They continue to hold long AUDCAD.
Practical takeaway
CAD remains a preferred short
AUDCAD longs are still favored
Softer Canada macro plus uncertain policy reaction keeps CAD vulnerable, even if oil is high
SEK / NOK
This is where the biggest tactical change happened.
The strategist had recommended long NOKSEK back in early February and has now taken profit on the remaining cash position. The reasoning is valuation and momentum:
the cross looks overbought on RSI
it screens rich versus relative value models
so they prefer not to chase here
That said, the underlying theme is not dead. If the Riksbank and Norway’s RNS support further upside, and if energy continues rallying after the latest escalation, the strategist is willing to re-engage.
They also say they still retain downside in EURNOK.
Practical takeaway
NOKSEK long is no longer an active full-conviction position
Profit has been taken
But the strategist is open to re-entering if macro/event inputs justify it
EURNOK downside remains preferred structurally
Best current trade read from the note
If I distilled this note into current preferences, it would be:
Stronger / preferred
JPY longs, especially via USDJPY shorts
CAD shorts, especially via AUDCAD longs
Reduced AUDNZD longs
Modest EURGBP long, but only while above 0.86
Neutral / lower conviction
EUR
GBP outright
CHF
Previously liked but now trimmed / monetized
NOKSEK longs
Clean trade map
1. USDJPY
Bias: lower
Reason: BOJ more hawkish than feared, April still live
Key range: 158 to 160
2. AUDCAD
Bias: higher
Reason: CAD still weak on policy/growth mix, AUD preferred on crosses
One of the cleaner relative-value trades
3. AUDNZD
Bias: higher, but cautious
Reason: ToT and dividends supportive
Risk: escalation-driven deleveraging hits AUD
4. EURGBP
Bias: higher modestly
Reason: still somewhat negative GBP view
Invalidation: through 0.86
5. NOKSEK
Bias: structurally constructive, tactically take profit / wait
Reason: overbought and rich at current levels
Re-enter only if central bank and energy inputs improve
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 72% and 73% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
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!