Yen crosses likely to get squeezed lower as we near year-end illiquid markets

My argument here remains the same, hedge funds have been building large positions in the Yen crosses hoping for a late rally which could ‘save’ their year. The Romney defeat has put this trade in jeopardy and as we get closer to December and much thinner markets, these positions are in danger of getting squeezed out. So forget about fundamentals and risk-sentiment, these moves will be all about market positioning and I think the risk-reward ratio favours the bears.

On an intraday basis, AUD/JPY could be of interest as we near the recent pivot level at 82.55 and a clean break below there could see more bulls head for safety. The next technical support below there is near 81.60.

AUD/USD trailing stops now reported below 1.0380 and they could also come under scrutiny in early Asian trade.