You could probably get the mods to change the thread title to "how is EURUSD now over 1.44??" for you.
Maybe their policy response has been so well relayed (whatever it is) and channeled amongst hedgies that the carry is so good and the likelihood of default so muted that this thing has turned into a money printing machine for hedgies.... Plus if anyone actually has enough money to push up the Market (as I'm sure some group of stodgy Central Bankers do), it forces sovereign CDS owners out of their position cuz the underlying is moving around so much. Its like you beating up a guy and hes squeezing out from under you and he finally breaks lose.... Whomever gets those CDS positions at the end, probably gonna make alot of money.
Lots of good commentary. To rehash and introduce a few things: How could one even say it "should be" at say 1.20. Would that not assume (maybe wrongly) that prior valuation was absolutely correct? I mean, if current values are so "incredulous", how could we ever truly think they were accurate in the first place (and if so...for how long)? And a poster was right in that, how could knowing it should be at say 1.20 even help you? It's at 1.4x. It could go to 1.60 before correcting. It could take 5-10 years before correcting "appropriately". And who is to say that in whatever time it takes to react appropriately that something else doesn't happen and completely change that original opinion (and possibly very harshly). That sort of thinking (that xyz should be at xx) is why so many lose money. Also, what is your time frame? What's your average holding time. If it's days (or less), you need not even ask such questions). If it's weeks/months/years, you've probably had this sort of question every...well...every few weeks. You always need to be aware of the long-term picture, but you need to trade the short-term.
It's a pattern in trading, particularly inexperienced traders. most people don't believe that the least probable action in a strong trend is trend reversal when in fact that probability alone could make you money for the rest of your life provided the money management is sound. Traders are so afraid of buying the top or shorting the bottom they cannot perform what needs to be done, like if stops or cutting a loser short was not possible. Too afraid to be wrong at the top or the bottom, ironically not afraid to fade very strong trends, which is exponentially inferior and much more dangerous. Crazy A
Market create the reasons. The reasons you gave would be priced in the future, if EUR/USD goes down. I bet that if the sell off takes place they would gave reasons such as yours, and they would attribute it to a guy from a "major" firm. Markets can create the fundamental, and not the other way around.