Macro backdrop (why FX feels “harder” again)

US data is re-accelerating at the margin (examples cited: Philly Fed, Empire, claims), which makes it tougher to stay structurally USD-bearish.

- If growth is “fine everywhere” and noise weren’t so loud, there’d be less pressure on the 🇺🇸 Fed to cut.

- Market’s preferred expression: high-yielding / growth FX (higher beta), with ongoing rotation of funding across G10.

- They don’t want to chase USD strength too aggressively because they believe some risk premium is embedded around:

  - 🇺🇸 Fed Chair political pressure / credibility

  - the upcoming Lisa Cook case (Fed governance risk)

## Current positioning (what were’re actually running)

A quick snapshot of the book as described:

### ✅ Working / sticking with

- 🇿🇦 Long ZAR (working)

- 🇸🇪 Long SEK (working)

- 🇨🇦 Short CAD (working)

- 🇮🇱 Small ILS hedge against ZAR longs (kept into weekend)

### 🔄 Rotations / adjustments

- 🇦🇺 AUD long exited/trimmed (bored with price action)

- 🇳🇿 Rotated into NZD long after manufacturing PMI beat; seeing momentum inconsistent with FX underperformance

### ❌ Not working / managed down

- 🇪🇺 EUR long reduced (“chopped in half” post US CPI), still holding some

- 🇬🇧 GBP shorts cut after GDP (regret), now waiting for next week’s employment/CPI before re-engaging

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## 🇪🇺 EUR: “funder/hedge” flow is rising; chart at a junction

The note flags euro being used increasingly as a funding currency / hedge, which changes the microstructure (EUR rallies get sold).

### Key technical markers (as stated)

- First break of the 200-day would “look poor” (bearish signal).

- But trend structure still intact until November lows at 1.1470 break:

  - Above 1.1470 = still a series of higher lows since Q1 last year

  - Below 1.1470 = trend breaks; basing thesis weakens materially

### What could save EUR near-term

- If the “US credibility angle” stabilises, the only real shot at EUR basing is:

  - strong PMIs next week

  - plus supportive real-money / franchise flows, which are “absent at present”

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## 🇬🇧 GBP: tough session; positioning and levels mapped

Sterling sold off with EUR, while higher-beta FX outperformed.

### Flow color (desk-level)

- Heavy selling from short-term hedge funds (SHFs), partially offset by discretionary HF buying.

### Political noise

- Jenrick defection to Reform (after Zahawi move): not instantly tradable, but a trend of Reform momentum could be GBP-negative over time.

### Their preference

- Long EUR/GBP into UK data catalysts.

### Levels (explicit)

- EUR/GBP

  - 200d: 0.86445

  - Risk point: 0.86

  - Resistance: 0.87

- GBP/USD (Cable)

  - Broke 1.3390/1.3410 support pivot; closed below 200d (**1.34045**)

  - 100d: 1.3366

  - 50d: 1.33305

  - 3-month pivot zone: 1.3275–1.3290

---

## 🇯🇵 JPY: jawboning slows the move; key intraday bands

JPY had a better session on aggressive rhetoric (Katayama) referencing alignment with US Treasury including intervention language.

- BoJ headlines suggest more FX focus; April pricing mentioned moving 14 → 16bp (small but notable).

- They still think USD/JPY can weaken the JPY further (“test the action”), but officials are successfully slowing the market.

### Levels (explicit)

- Support: 157.30/40

- Resistance: 158.75/90

- 160 framed as the next big figure above

They’re sticking with JPY longs and plan to trade gamma more actively.

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## 🇨🇭 CHF: losing faith in USD/CHF short; prefers CHF/JPY long

With strong 🇺🇸 data keeping USD bid, they’re “less enamoured” with USD/CHF shorts.

- CHF longs still make sense as a hedge vs EM longs (geopolitics), but USD down vs low yielders is hard to justify if US data stays firm.

- Plan: convert some USD/CHF shorts into CHF/JPY longs.

### Levels / markers

- CHF/JPY near 196 handle (area of interest)

- USD/CHF near 200d at 0.8057

Flow note:

- Systematics turned CHF buyers after 3 days selling; real money small net buyers on week; HF small sellers.

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## 🇦🇺 AUD & 🇳🇿 NZD: NZ data strengthens long bias; AUD rangey

### 🇳🇿 NZD

NZ manufacturing PMI highest since 2021; RBNZ nowcast lifted:

- GDP nowcast: 0.9% Q4, 1.4% Q1

Other supportive signs: filled jobs at 8-month high; building permits up.

They were early, disappointed by price action, but now giving NZD more time.

### 🇦🇺 AUD

No change: gyrating around 0.6700.

- Keeps AUD/CAD longs

- Reduced AUD/USD, but holds a constructive stance above 0.6650/60 (near-term line in the sand)

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## 🇨🇦 CAD: remains bearish; short CAD vs EM longs

A 🇨🇳–🇨🇦 joint statement is seen as potentially raising US–Canada tensions medium-term.

- Continues running short CAD, mainly versus MXN and ZAR longs.

- Positioning “close to flat” → room for CAD to weaken further.

(Note: this is a more bearish CAD take than many “commodity = support” heuristics; it’s framed around macro/geo/policy risk and relative beta.)

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## 🇸🇪 SEK & 🇳🇴 NOK: still like downside EUR/SEK; watching EURNOK DMAs

### 🇸🇪 SEK (EUR/SEK lower bias)

EUR/SEK briefly dipped below 10.70, bounced to ~10.72.

Drivers for lower EUR/SEK:

- better Swedish growth outlook

- rising real wages

- more govt issuance + fiscal differentiation

Tactics:

- Keep core shorts

- Would add on risk-off pop toward 10.82/85

- A break of 10.6650 is the “pay attention” level (last year’s low region)

### 🇳🇴 NOK (EURNOK downside bias)

EURNOK consolidating; they retain downside.

Technical encouragement would be:

- 2-day close below both 100 & 200 DMAs:

  - ~**11.7330** and 11.7440

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## 💡 What this note is really “saying” (in one screen)

- 🇺🇸 Data strength is the swing factor: if it continues, USD up becomes harder to fade.

- They prefer beta/growth FX expressions (NZD, SEK, ZAR) and are cautious on chasing USD because of Fed credibility/political premium.

- They’re actively managing around major technical pivots (EUR 1.1470; cable 200d; USDJPY 157–160; EURSEK 10.6650/10.85; USDCHF 0.8057).