With the most significant economic indicators being released today revolving around the U.S. economy, the Dollar is likely to see some heavy volatility, especially against the Euro and Yen. Yesterday, the greenback was able to maintain its bearish trend against the EUR, reaching the 1.3500 level.

Although the pair has bounced back slightly, most analysts are not predicting any significant upward movement in the near future. Conversely, the USD dropped against the Yen as investors flocked to the safe haven status of the Japanese currency in trading yesterday. The USD/JPY fell over 60 pips before leveling out at its current level of around 90.20.

Today, investors will want to pay careful attention to the testimony set to be given by Fed Chairman Ben Bernanke. After last week's surprise interest rate hike for emergency bank loans, anticipation is high for any new news regarding the state of the U.S. economy. Positive sentiment will likely lead to major gains for the greenback.

Additionally, the American New Home Sales Report is set to be released later today. If the figure comes in as predicted, traders can predict big things happening for the Dollar. On the other hand, the housing market has been lagging for the last few months. Negative news may temper investor confidence in the Dollar, leading to big gains for the Yen.