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How well correlated are the global markets, and how does one impact another?
Eur/Usd has not really lost its correlation with the two global markets, shown below, that impact dollar values and set fair value during the course of each trading session.
The euro makes up nearly 60% of the dollar index, and as such provides a window into Usd sentiment.
As we can see, the Eur/S&P correlation is strong. Then add in the West Texas Intermeiate oil chart below:
We can then see that, like a spider's web, a pull on one side of the market creates a push on the other side.
Global markets are eleastic, they flow across one another, and they create a series of momentum waves.
There is no point trying to trade forex without knowing what is moving values as each regional market gets underway.
It is oil and equities.