Dollar slides ahead of Fed minutes

The main focus, however, will beon the Fed minutes for August's rate decision which will provide clues for the economy's outlook and the possibility of using second round stimulus.

Last week, the Fed Chairman said policy makers will use all the available monetary tools to prevent the economy from falling into double-dip recession, while the previous day US personal income came lower than estimates before the release of non-farm payrolls report on Friday.

The dollar index, which tracks the dollar movements against six major currencies, retreated to 82.89 compared with the day's opening at 83.16 after hitting resistance at 83.15 levels.

With regard to the dollar-yen pair, it is showing decline on the daily basis but facing upside pressure from the 4-hour and 1-hour charts as US S&P/CaseShiller beat estimates causing the pair to pare some of its losses, yet it is still below strong resistance at 84.78. The BoJ pledged 920 billion yen stimulus and there is high possibility of intervention to weaken the currency that is currently hovering near 15-year high against the dollar.

So far, the pair is trading at 84.36 after recording a high of 84.66 and a low of 84.03, whereas support is seen at 83.85 while resistance is at 85.35.

Concerning the euro-dollar pair, it rebounded from a low of 1.2623 bouyed by the breach of resistance at 1.2680, where it is currently trading at 1.2724. Today, unemployment remained unchanged at 12-year high in July while CPI ticked down to 1.6% in August from 1.7%. Later in the week, important fundamentals from the euro area are due, including rate decision as well as the latest growth and inflation projections.

The euro-dollar pair so far has touched a high of 1.2735, while for the rest of the day the pair is expected to move between support and resistance at 1.2625 and 1.2770 respectively.

Turning to the sterling-dollar pair, it slipped on the daily charts as it was unable to snap the earlier losses due to the rise in 10-year gilts on worries global recovery is receding. The pound advanced after the better-than-expected in mortgage approvals but the boost was not enough to lift the pair higher.

The royal pair is currently trading at 1.5398 after touching a low of 1.5360, whereas it is expected to move between support at 1.5360 and resistance at 1.5495 for the rest of the day.