Booking some P/L in the GBP crosses

I don’t like having a confused view of the world, which is what I have now, so I’m reducing my positions especially in the GBP crosses. I’ve been running a small GBP/JPY long position which I’m cutting with a 200+ pip loss and I’m also cutting my short EUR/GBP position for a 100 pip profit; that’ll leave me with a small loss but I can always reinstate when my head is clearer.

I’m not sure what the impending end to QE2 will mean for the FX markets; is the market already so short USD and long CHF, AUD, and JPY that we see a big buy-the-rumour-sell-the-fact move? Or will the end of QE2 spell out a massive increase in risk aversion as equity markets fall around the globe and USD/CHF falls another 15%?

I’m still running very small cable and EUR/JPY positions, just to have an interest, and I think we may be entering a phase of heightened volatility and extended ranges so I’m going to sit back and wait for ‘silly’ moves, at least until the crystal ball clears.