The EUR USD posted a closing price reversal top on Monday after Moody's Investors Service said it cut Anglo Irish Bank's unguaranteed senior debt to Baa3 from A3, and cut its dated subordinated debt to Caa1 from Ba1.

The chart pattern suggests a possible top, but the pace of the break from the top may be hindered by lingering concerns that the U.S. Federal Reserve will engage in quantitative easing.

Technically, I had been anticipating a possible top or at the least a technical bounce once the Euro reached the 50% price level of the main 1.1876 to 1.5144 range at 1.3510. The current rally reached 1.3507 before sellers stepped in.

If confirmed by at break through 1.3424, the Euro may begin a correction back to 50% of the 1.2644 to 1.3507 range. This price is 1.3075.

The technical pattern is clear, but in order for this to come to fruition, it needs the cooperation of a couple of fundamental factors. Sovereign debt concerns are likely to be a bearish driving force, but this news could be negated by bullish economic news from the Euro Zone or more bearish economic news from the U.S.