Today’s main risk event is Bernanke’s testimony in front of US lawmakers. I noted earlier that Bernanke tends to disappoint QE hopes, and the market is so far reacting within this pattern.

“The thing is, Bernanke has been known to disappoint those hoping for QE, so if pre-risk event dynamic is already very risk-on, it will be hard to extend.”

Bernanke’s statement was very stale, reiterating previous points and really not giving any increased reasoning for QE3.

Although in answering questions, Bernanke DID talk about the effectiveness of QE, it is nothing new.

Meanwhile, the USD and JPY are strengthening across the board, a sign that hopes of QE is getting crushed.

By 10:50AM EDT,

EUR/USD fell from resistance near 1.23 below 1.22 as the questions continued.

GBP/USD also turned down from a declining trendline in July, falling from about 1.5670 down below 1.5560.

EUR/JPY and GBP/JPY are also falling sharply.

Commodity currencies (CAD, AUD, NZD) are falling as well against the USD and JPY.

Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.

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