After a wild week of Euro price action that included a 500+ pip decline to one-year lows near 1.3900, and a subsequent 300+ pip rally on Friday, shell-shocked traders may not know what to do next.

The US dollar fell sharply across the majors on Friday as US retail sales and producer prices proved to be broadly bearish and unsupportive of speculation that the Federal Reserve is hawkish enough to consider raising interest rates before year end.

Despite the release of bearish US data, the US dollar was strong across the majors for much of the day as risk aversion remained the predominant them.

Was there strong US data on hand?  No.  Hawkish comments from a Federal Reserve member?  No.  So why did the dollar gain?

The dollar is extremely overbought, suggesting we may be nearing a point where risk/reward warrants selling the greenback.

The US government’s seizure of Fannie Mae and Freddie Mac has provided a boost to the US dollar and carry trades on Monday, and has received applause around the world.

The US dollar ended the day little changed from Thursday’s close despite a choppy morning of trading, though the currency does still remain relatively strong across the majors.

The US dollar resumed its rally on Thursday, as the European Central Bank and Bank of England rate decisions did little to shift broad interest-rate expectations.

The euro remained a laggard as Euro-zone GDP in the Euro-zone was revised down to match a 3+ year low of 1.4 percent in Q2 from a year earlier from 1.5 percent.

The US dollar rally has been relentless, with the most recent push fueled by the minutes from the FOMC’s August meeting.  But which central bank will hike rates first?