Falling for the second day in a row, the single currency is nearing its lowest levels in four-months against the euro on the US dollar index, which tracks the performance of the currency against six-majors.

Trading at 76.840, the index opened trading at 76.933 while setting a high of 77.013 and a low of 76.735. Inflation in Europe remains a major issue while Libya's violence continues to pressure traders to target alternative assets such as gold to preserve wealth.

Today's CPI Flash Estimate from the euro zone showed that inflation spiked 2.3 percent in February, compared with the previous 2.4 percent.

Projections that the Federal Reserve will keep interest rates unchanged in the upcoming rate decision led the dollar to lose grounds against most of its counterparts, while the European shared currency traded higher against majors ahead of ECB's rate decision that will be released later this week.

The bank is expected to preserve rates for the upcoming month, but inflation threats could pressure policy makers to shift the bank's policy into more Hawkish rather than Dovish.

Trichet hinted earlier this month that the bank will not hesitate to increase rates incase inflation threatens recovery; this comes conversely with Bernanke's statements that the Fed will most probably keep rates unchanged.

The Euro maintained its upside trend, where it ascended slightly to trade at 1.3809, compared with the opening levels of 1.3805, where the pair set the highest at 1.3853 and the lowest at 1.3784.

Further appreciation is expected as far as trading remains above the above the support at 1.3745, where a breach of the support may force a downside correctional move to be activated with targets set at 1.3507.

However, the upside trend is forecast to prevail as the ECB's rate decision approaches, with targets at 1.3890.

As for the pound, the GBP/USD pair is in attempt to breach the resistance at 1.6300, allowing it to appreciate further and target 1.6435. The pair opened trading at 1.6256 while setting a high of 1.6328 and a low of 1.6252 while currently trading at 1.6261.

Trading range for today will be bounded by the support at 1.6125 and the resistance at 1.6300.

The dollar gained grounds against the yen, as it failed to breach the support at 81.60, where investors turned bearish in regards of the yen after the housing data from Japan came pessimistic.

The weekly trend for the week is bearish, with initial targets set at 80.35, which if breached, would pave the path for the pair to descend to test 76.90, note that stability below 82.45 is required to accomplish these expectations.

The USD/JPU pair is trading at 81.99, compared with the opening levels of 91.78 where it set the highest at 82.23 and the lowest at 81.71.

Note: data was collected at 14:40 GMT.