EUR strength against the dollar here is bizzarre, but there are so many dislocations in these markets, why not add one more. I hear that massive devaluing of the EURO is out of the question as it would cripple Germany. Instead, they are throwing half of the EUROZONE to the wolves.
Europe has turned the corner; while the numbers will lag for a while, the paralyzing fear of financial collapse, widespread just a few months ago, has been replaced by a sense that the worst is past, that there are no more unknown unknowns, and that there is a [small] light at the end of the tunnel ... confidence begins to return, consumers begin to spend again ... and so it goes ...
If you trade price instead of what you think or hear, trading would be less surprising. I try to dismiss anything besides price itself to avoid such frustrations.
The EUR/USD hanging near 1.30 to me says that the markets do not believe in the US economy strengthning, or alternatively, that the EU economies are not as bad as they seem. I might believe the former, I don't believe the latter for a second.
The EUR/USD strength is almost certainly that UBS has exited the US stock market and is repatriating EUROS. When that dislocation ends, the EURO is going back to 1.28, and eventually my year end target of 1.24 ish.