FX week ahead: Portfolio remains light on risk– JP Morgan

Heading into a new week, the analysts at JP Morgan offer their outlook on the major currencies, in the wake of a relatively data-light macro calendar.

Key Quotes:

“Portfolio remains light on risk.

Slight defensive tilt to navigate protectionism-related uncertainty

Maintain a modest USD short vs. other reserve currencies like CHF.

Keep selective high beta shorts expressed via AUD and NZD versus the Euro.

Oil is re-emerging on macro radars as a potential petro-FX catalyst, stay tactically long NOK/SEK and short EUR/NOK.

CAD is on the watch list as a potential buy given the better tone to NAFTA negotiations.

Technical Strategy:

The range bias for the USD indices persists following this week's failure at key resistance.

The breakdown in USD/JPY reasserts the medium-term downtrend; the backdrop for Antipodeans continues to deteriorate.

Stay long:

NOK/SEK, USD/HUF, USD/CZK, USD/NOK, JPY/KRW, USD/KRW, USD/CAD and USD/ILS & short PLN/HUF, GBP/CHF, AUD/CHF, USD/CHF and NDZ/USD.”