There is another cluster referenced by the spike in 6/10, and that is the one in at the end of 1998/beginning of 1999 - now what is a long term precise memory. Let's assume there is the residual computational structure which provides long term memory in forex.
That is a hard memory, a hard valuation structure, hardened by its input into the real debt economy. This suggests why EUR rises on resurrection of a debt economy, it activates this residual. In these cases the debt economy referenced is a housing bubble supported by too low Fed fund target rates and the introduction of the EUR itself on 1/1999.
Why does the introduction of the Euro reference a debt economy. Because it gives the market opinion of the EUR until it got supported by intervention in 01, which sparked the great rise.
The point is the debt economy is based on political management of currencies, a management (which has since the 80s preferred debt to asset bulding) which produced the EUR/USD conduit and which failed in the crisis. It failed because the US decided to kill the housing bubble with high interest rates.
This took some time to revalue financial assets and in this space the stock market took off. What I am saying is that 6/10 spike is referencing political management of currencies, in this case the EUR/USD conduit. But it is referencing the limits of political management. As I have been suggesting patterns are not obvious until after they have formed, that is the hardness of forex.
Let's assume EUR could be separated from this valuation structure. That is the question I have been asking, what is a true valuation for EUR. Why would I ask this, because it might have seemed this economy is over, it was supposed to have been burned away in the crisis.
But as I have always said it may well not be and there is always the search for a replacement (the uncertainty in the spike of 6/10). The not very satisfactory dollar carry trade was one, as I asked what is the new one (the continuation of the carry trade ad infinitum) ?
In all events the US should not lose faith in a recovery. Perhaps one can see Canada as a gauge for the recovery in the US (it is its biggest trading partner, a fact which tends to get overlooked sometimes) as well as referencing it own strong and unique economic fundamentals ? Fundamentally the question is this: is there a new political management of the EUR/USD conduit going on and what will a recovery in the US do to it.
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