The dollar traded slightly higher as witnessed on the U.S. dollar index despite speculations that the Fed will slash the interest rate it pay on banks' excess reserves, where further details might be provided on the matter as the Fed chairman testifies before the Senate Banking Committee today and the House Financial Services Committee tomorrow, therefore, investors predict that the dollar will lose momentum against majors, especially the Yen where analysts expect the dollar's to drop to nearly a 14-month low against the Yen.
Earlier reports showed that BoJ will take further measurements to depreciate the Yen as it struck a 7-month high against the dollar last week. Spreading more doubts is BoE Minutes report which showed further threatening from U.K.'s inflation rate that might cause a delay in economic recovery as the outlook for near-term and medium-term continues to over-run its targets set by the bank at 2.0 percent.
Investors targeted the pound and the dollar, where the pound rallied after BoE announced that it will preserve the base interest rate of the bank at 0.50 percent, despite that inflation outlook worsened, in addition, members of the committee voted unanimously to maintain Asset Purchase Facility program at £200.0 billion.
Meanwhile, the euro is expected to maintain its downside trend till Stress Test results are released later on this week, noting that the EUR/USD pair reached a three-month high last week before it dropped once again.
The dollar extended its gains on the U.S. dollar index, which tracks the performance of the dollar against a basket of currencies, where the index rose to last trade at 82.76, from the opening levels of 82.73; the index reached the highest levels for today at 83.82 and the lowest at 82.56.
As for trading, the euro-dollar pair traded lower on the daily scale as the dollar extended its rally against the European common currency, to currently trade at $1.2827 compared with the opening levels of $1.2877, where it managed to reach the highest levels today at $1.2912 and the lowest at $1.2816. The pair breached pivot support levels at $1.2845 which paves the path for the pair to extend its decline and target $1.2760 - $1.2750, keeping in mind that a breach for the previously mentioned levels will discard these targets.
Moving to the Royal currency, the pair extended its second consecutive gain where the pair is currently trading at $1.5279, compared with the opening levels of $1.5257, where it managed to reach the highest levels today at $1.5335 and the lowest at $1.5182. Signs of a bearish technical pattern are currently appearing and will be completed if the pair succeeds in building a base below 1.5355, and then head towards 1.5155 once again.
Finally talking about the dollar's performance against the Yen, the USDJPY pair traded lower from its opening levels of 87.47, where it's currently trading at 87.00, the pair managed to reach the highest levels today at 87.50 and the lowest at 86.84. A bearish intraday trendis projected with targets at 85.95, keeping in mind that a breach of 87.20 would cause the pair to appreciate further to target 88.00 levels.