The EUR/USD soared on Tuesday to its highest level since October 22, rapidly approaching the October 15 main top at 1.1494. From a technical perspective, this is a very important cycle date since it was the day that many investors feel that the markets decided a rate hike by the Fed before the end of 2015 was inevitable. A trade into this level will mean that investors have completely taken out any further rate hikes in 2016.

The Euro was up sharply against the U.S. Dollar today. This signaled a shift in market sentiment towards safe assets. The weakness in the dollar is seen as a response to gloomy global economic data coupled with negative sentiment prevalent in the market over the last two days.

Looking ahead, Fed Chair Yellen's testimony is likely to grab the eyeballs later today as markets await some clarity on the Fed's rate hike prospects.

Meanwhile, clearly dovish comments from Yellen may trigger a renewed USD sell-off across the board.