EUR/USD Flashes Reversal Warning Amid Bessent Plan and Warsh Dilemma

The EUR/USD is facing a potential reversal after flashing twin gravestone dojis on its daily chart. This warning sign has been accompanied by signs of fatigue in the recent rally, with back-to-back gravestone dojis printing on the daily.

While some caution is needed interpreting the relationships given the short timeframe, it suggests EUR/USD may take its cue this week from the US long end and broader risk appetite, rather than the front end.

Beyond the technical picture, traders are waiting to hear from US Treasury Secretary Scott Bessent on how Treasury plans to consolidate the US fiscal trajectory. Meanwhile, Fed Chair Kevin Warsh's appearance at Jackson Hole looms large, with some questioning whether he will confront the contradiction between his views and Treasury's increasingly activist role in trying to stymie market forces.

For EUR/JPY, a doji printed on Friday after the pair was rejected at 186.00 resistance has raised questions about the merits of buying the dip, with an evening star reversal pattern potentially unfolding.