Risk off sentiment has definitely been the predominant factor in Asia trade over the last two days. The Nikkei had risen by 80% since early November so I guess its no surprise to see it starting to ease off a bit. If the Nikkei eases, then the Yen crosses should follow, and the AUD/JPY recovery stalled this morning at its 99.50 break-down level; another little sign to take heed of.
I’ve cut my cable long for a gladly-accepted 50 pip loss and I’ve cut 50% of my USD/CHF longs just is case the risk-off trades really pick up steam. I don’t think it’s a good market to have a large position in; stay small and then take advantage of the swings.
