What's happening with the dollar?

 
We've seen a continuous decline in the dollar. It's nowhere near the low back in 2008 at around

1.60, but how low can it go?

The U.S. treasury is the primary guardian of the dollar, so what steps can the treasury do to reverse this? At this stage, very little. Aside from verbal intervention, trying to talk the dollar up, there is likely to be no action to reverse this. We are dealing with a sentiment driven move and until the fed begins to get on track to raise interest rates, there is very little fundamentally to support the USD.

To add to the dollar's downside, there has been a rally in gold prices, which correlates with dollar weakness. On the upside for dollar, only 30-40% of the fiscal has actually hit the economy, so watch for the US economy to feel those affects as it will wind through the economy over the next several months.
What about the technicals?

We've seen a major trendline developing on the daily chart for quite a while, with significant support currently at the 1.4630 area. This will be a major trendline to watch.

If we continue with dollar weakness, we will be focusing on the 1.5250 to 1.5300 areas as the next areas of previous support/resistance.
Is the Euro becoming the non-risk currency of choice? It is the most solid currently.

Which other currencies to watch for?

USD/CAD- Broke through major support with a focus to the downside, maybe going to the 1.04 area or further.

EUR/GBP- the .8900 levels is a significant support area. Take note that on a Daily chart is showing the MA set to 200 at .8860, with a hawkish reading on the inflation report.

USD/JPY- The big picture on a Daily chart shows a possible reverse Head and Shoulders with a break above the 92.50, right neckline, as the confirmation, though it's currently headed to the downside.
AUD/USD- Testing prior highs at the .9329 with stochastics showing overbought, but still some room to move up.

Newsflash- This just in!

The NFA has passed a new regulation intended to protect retail investors in the US, by preventing excessive use of leverage by traders who may not have an adequate understanding of the associated risks.
The new rule dictates that starting November 30th 2009, a 1% margin requirement for the major currencies will take affect, capping the maximum available leverage at 100:1.

Contact your broker to see how this will affect you.