Unexpected, Counterintuitive, Unwelcome $ Rally Anyone...?

I am now out of all $ longs. I was expecting just a relatively small bounce (which we got) in the big picture scheme of things, and I didn't think it would be anything more than that. The $ however has proceeded to inflict significant technical damage on the $/euro and $/yen below 1.2175 and above 116.50 respectively. I would therefore have to say that one needs to treat these kinds of technical breakdowns with a healthy dose of respect. So let's sit it all out and wait... And then wait some more... I have a feeling that the combination of the Chinese New Year in Asia and tomorrow' Fed meeting has exacerbated the situation a bit, but one nevertheless needs to be cautious with $/euro trading below 1.21 and $/yen trading above 117.50. If my suspicions turn out to be correct, we could see 1.18 $/euro and 120 $/yen handles within a couple of weeks, as the majority of market players, it would seem, are JUST NOW positioned for $ weakness (yes, I just saw the IMM FX data!). Not a good sign to say the least!

I know the U.S. economy fundamentals don't exactly support a stronger $ at this point, but one can't argue with the market. It could be right for a lot longer than we could be solvent...