The jitters and the anxiety remains evident on what usually is known as thin summer trading, yet with the uncertainties and hurdles in the path of the global recovery, the pessimism is a dominant companion in the market!

A state of anticipation and anxiety can be sensed in the market, as investors assess the aftermath of the confidence vote in Greece and look ahead to the FOMC decision and Bernanke's speech which will be the highlight for the day!

The relief rally is gradually losing momentum as investors had already anticipated that Papandreou will win the confidence vote, and that is exactly what was seen. It is a good step, yet not a major one, that is the reality dominating the market as the big test for global confidence remains the ability of Papandreou and the new cabinet to pass the austerity package and actually follow-through with the implementation.

With this jittery feeling and the remaining doubt that Greece will not continue at this pace of progress with high uncertainty over the weak political support behind Papandreou to push the reform forward, the bets remain on the slowing outlook for the recovery!

The dollar is holding its gains this morning, and though of early highs, the index gauging greenback's performance is still trading bullishly ahead of the FOMC and Bernanke. The dollar index is currently hovering around 74.68 off early lows around opening levels at 74.51 and off the high set so far at 74.86.

Investors hope that Bernanke will not be that downbeat on growth, which will surely be very bearish on a fragile market sentiment. The odds for the chairman to give hints on a third round of quantitative easing are very very slim and the absence of those comments might not be very bullish on the dollar for now, opposed to actually saying growth indeed is slowing and rapidly, which will be bullish on the dollar on renewed risk aversion and haven demand. Bernanke is likely to keep his stance on the monetary policy and pledge to hold rates at their record low to support the waning recovery amid anchored price pressures for the time being, which will keep the longer term downside pressure on the dollar and also push the dollar softer in the interim.

For the euro, the main rival for greenback, the overall pessimism slightly eased as the state of anticipation is rather becoming a trend for the euro! The euro now is looking forward for the FOMC, then the EU Summit that will start tomorrow, then to come in the two weeks ahead a Greek vote on the measures, an EU decision on the bailout and a promised ECB hike and accordingly the busy outlook for the euro is the biggest uncertainty which is fueling the volatile status quo.

The EUR/USD is still supported by the passed vote and mainly a rate advantage that will be confirmed with the steady rates from the Feds later tonight. The pair rebounded from the earlier low at 1.4343 as the pair was to test critical breached areas at 1.4325 and return to the upside. The bullishness for the pair is evident with stability above 1.4260 which so far carried the pair to the high of 1.4431 and still has the bullish support to continue towards 1.4455 areas.

As for sterling, the royal pound was not as lucky as it slumped heavily versus the dollar after the BoE minutes signaled rising worries among MPC members over the recovery pace and hinted the possibility of actually expanding the APF shall conditions continue to worse.

The members were still split on the motion to leave rates at 0.5% and APF at 200 billion pounds, as Posen remained arch dove and called for the 50 billion pounds expansion, while the hawkish camp narrowed to only Dale and Weale calls for 25 bp hike as arch member Sentance's term ended and accordingly his calls for 50 bp tightening as new voting member Ben Broadbent joined the majority of the members.

The downbeat outlook for the recovery from the bank pressured sterling to the downside especially with trimmed bets for monetary tightening and actually more for loosening! The GBP/USD slumped from the intraday high of 1.6261 as the resistance held strong against the upside attempts and pushed the pair to record the low of 1.6110 and currently trading around 1.6121 and likely to continue more to the downside with stability below 1.6145 eyeing next areas of 1.6045.

As for the Japanese yen, the pending status of the market is clearly evident on the pair with tight ranged trading. The USD/JPY continues to trade within the same range and traded today between the high of 80.33 and the low of 80.09 the downside move is now seen on the pair and as far as it fails again to breach through 79.65 to the downside will keep the pair lingering at the same range again awaiting the needed momentum to drive the pair out of its consolidation range.

More volatility will be seen at the time of the decision later today at 16:30 GMT and will extend at the time of Bernanke's press conference at 18:15 GMT and we will wait and see what the Feds have in store for us and whether this pending state of market will prevail or will it come to an end...