Loopback Test Fail between 2 XBees Pro Series 1

I have a current setup between 2 XBee Pro Series 1 modules. One side is connected to the computer via a USB adapter from Sparkfun, and the other side, it is just attached to a Explorer Regulated adapter from Sparkfun.

I am trying to do a loopback test to test the communication of the 2 modules. The settings for each xbee modules are default expect the Source Address, which are unique for each module, the Destination Address, which points to the other xbee module. The baud rate is set at 57600. And they have the same PANID.

For the remote xbee, I have shorted the DIN with the DOUT using a jumper wire, and this module is power externally using a 5V source.

While sending information through the terminal in X-CTU, I noticed the Rx LED blinking on the xbee connected to the computer, and the DOUT blinking on the remote xbee. But there does not seem to have any response from the remote XBee. Ie, I do not see double letters being printed in the terminal tab.

Is there any problem with this setup?

Photo of my setup: https://www.dropbox.com/s/lpyq7oakvkvdujt/XBeeLoopbackSetup.jpg?dl=0

The XBee module is a 3V device. Have you verified that your board is regulating the voltage level down from 5V to 3V? Same with the data lines, They should be at 3V.