I do think (and see) that smart money stops the buying before Trichet speaks, holds positions (definitely not closing or shorting), and when Trichet confirms no rate cuts, resumes buying. But when smart money stops buying euro then some cowboy traders from the other sides of the pond (usually, but we have cowboys in Europe too) start shorting and that drives down the prices. Which works right into the hands of smart money resuming buying. Bottom line is, after a Trichet event, its not a news spike, or short squeeze; its resuming a 6 year and overwhelmingly strong trend. In 2005 everybody and his dead cat was yelling "the tide is turning", "parity soon", "0.8 dollar", etc. A full year's worth of decline didn't stop this trend, why would some words turn it around? I've been thinking what would stop or even turn the trend and I just don't see anything on the horizon. Even a rate cut from the ECB wouldn't fully convince me. Sure there will be some dollar strength, but the dollar's voes are twofold: excessive printing and rate cuts. So if we had a rate cut in euro, it still would emerge as the stronger pair. Plus all carry pairs just strengthen ad infinitum. Thus I don't see 1.6 something will be the highest we see. Maybe we'll see 2. Maybe 5. I don't know. But at least I know the direction for now. I completely agree with your second paragraph. Only when I'm speaking of a 6 year trend, I consider that a long term move. I think I'm young enough to say that 6 years? Shit, that's a long time! But I only take long term positions (like choosing a base currency) based on this trend; I don't necessarily trade on it.