Following yesterday's surge in USD strength, the EUR/USD cross now appears to be consolidating in expectation of a volatile movement. After rising over 100 pips, the USD now floats near 1.4070 against the 16-nation European currency. The greenback experienced similar results against the British Pound and currently trades at the 1.6120 price level.

The American economy is expected to publish a number of significant reports today. With impacting housing data due at 15:00 GMT, there is a possibility of a build-up towards USD strength if the New Home Sales report can provide positive news for the US economy.

On the other hand, the most important event of the trading day is likely going to be the Federal Open Market Committee's (FOMC) Federal Funds Rate statement at 19:15 GMT. With Fed Chairman Ben Bernanke's recent re-confirmation there is an opportunity for Chairman Bernanke to return some market optimism with a renewed mission statement with this rate statement. Hawkish statements may give a boost to the USD in the minutes after the release.