Session Recap: Majors consolidate after dramatic price action

The European session has seen consolidative moves in major crosses after the market was shaken by concerns over Italian election outcome. Meanwhile, Fed Bernanke's semi-annual testimony to the Senate Banking Committee at 15:00 GMT is the main focus of the day. The dollar is mixed, although most pairs are hovering around their opening levels. EUR/USD fell below 1.3100 for the first time since early January and now consolidates around 1.3080, having set a low of 1.3017. USD/JPY traded as low as 91.40 but is now back around 92.00. GBP/USD failed to hold above 1.5200 and it is now virtually unchanged at the 1.5160 area.

Main Headlines in Europe (in chronological order):

Member of Merkel’s CDU says Italy needs a functioning government that must stick to Monti’s reform path

Commodities Brief – Precious metals rally on Italian quagmire, Gold testing psychological 1600 barrier

BOE’s Bean: expectation is that UK growth will gradually strengthen through 2013-4

Sequestration deadline looms as US political brinkmanship prevails

Euro posed to breach 1.3000, capisci?

UK at risk of further downgrades

More from BOE Tucker

UK: CBI Distributive Trades Survey – Realized down to 8 in February

European markets lower on Italian results, Italy stocks drown -4.60%

Bernanke likely to reaffirm the accommodative stance - BBH

A mish-mash of US data coming up and testimony from Bernanke

Berlusconi open to alliance, says it will take time

Europe concerned with Italian election outcome

US: S&P/Case-Shiller Home Prices Indices rises 6.8% in December

US: Housing Prices Index at 0.6% as expected in December