EURUSD: an evening star in the morning

It’s early in the day yet, but if EURUSD closes near current levels, we’ll have closed the week with a bearish reversal pattern - and just after a test of key resistance.

The disappointment off the Bernanke testimony yesterday, which was very cautious and non-committal (once again, I would underline Bernanke’s imperative to avoid too much political attention in this campaign season) rather than all-out dovish has risk on the defensive and the USD and JPY back on the bid today. This sets up a very technical set of bearish chart circumstances heading into the weekend, assuming we close around here or lower in EURUSD.

Chart: EURUSD
If we close here or lower in EURUSD today, we’ll be closing the week with a pronounced evening star candlestick formation just after we failed to remain above the psychologically important 1.2500 level Note also that the high yesterday was a near perfect test of the old 1.2621 low from January (horizontal line) and coincided with the 21-day SMA.