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Today's volatility saw the US dollar index re-test its down trend line resistance at 75.65/70.
However there was little in the way of volume to suggest that the dollar down trend that has been in place since March was in any danger of showing signs of reversing.
The trend line from the 17th August highs and the 50 day moving average resistance still cap the market.
Sterling has also recovered some of the ground lost in yesterday's sell-off.

EURUSD - as we suspected this morning we saw the Euro re-test the 1.4810/20 support area, and the 50 day moving average that has supported this up move since March. The subsequent bounce off this support area has provoked another rebound in the Euro. While this key support level holds the Euro will be vulnerable to further rallies, though we would need to see a break back above 1.5060 to re-target the highs at 1.5145 and the next resistance at 1.5290.

GBPUSD - the cable overshot the 1.6320 support level and rebounded off 1.6270/75 area retracing just over 50% of the move up from 1.5705/10 to the highs at 1.6880. Overall sterling sentiment still remains slightly negative given the current Dubai situation. A move back above 1.6540 re-targets the highs of this week at 1.6740.

EURGBP - the Euro appears to be exhibiting some weakness here in the short-term and we could see a drift back towards the 0.9030 level, after its failure to regain the 0.9100 area.

USDJPY - the yen seems to be benefiting from some safe haven buying in the near term as the market made a new 15 year low at 84.80 overnight. However, concern about intervention by the Japanese monetary authorities has prompted some profit-taking today. It would need a move back above 89.20 to ease the downward pressure, and the market may also find resistance at 87.10, the previous lows.