Again the actual causality is highly complex, if you view it as data it looks like a plunging or smoothing effect from one market into another: falling dollar ups commodity/energy stocks, falling market causes money flow to $ and yen, technically rising Euro causes dollar fall which ups commodity/energy stocks etc.
A rising dollar should go with a rising market to an extent in a normal economy, but the fundamental thrust behind the trend up in the market recently has been a dollar predicated on low interest rates which should value it down. These complexities cause valuation shocks.
Anyway, The spikes on the 4h if you look at them on 30 min are an area of volatility, which one sees at a market turn. This is a very dangerous area to trade and it is one reason to try and avoid a top, which is so easy to get caught into.
The 1 week was indicating a time of volatility. But that is some serious structural support EUR/USD spiked under on 1 month yet the fundamentals are not entirely supportive of that rise, the market needed something to break through the structural congestion referenced on the 1 week chart, which it did not get today anyway, it got instead a euro shock.
Basically EUR/USD said yes and the markets said no, for today. But is that yes to a recovery or business as usual with $ at very low interest rates ?
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