Dec 062011

6C 06 12 (1 Min) 12.06.11

12/6/2011 BOC Rate Statement / Overnight Rate (0400 HI time / 0900 EST)
Forecast: 1.00%
Actual: 1.00%
Previous Revision: n/a
Started @ 0.9761
1st Peak @ 0.9783 – 0401 (1 min)
22 ticks

“Final” Peak @ 0.9836 – 0438 (38 min)
75 ticks – 2x top

Reversal to 0.9820 – 0451 (51 min)
16 ticks

Notes: The BOC left its main interest rate unchanged today, citing an upbeat forecast of growth in Canada and the US with a bleaker outlook for Europe. With a small expectation of another rate cut, the market reacted strongly heading into a measured upward fan. This was not apparent though after the first 3 min with the 200 SMA providing resistance. I would exit on the 0402 candle after when it started to retreat without hitting the 200 SMA. As a long term reaction is common on this report, keep an eye on how it interacts with the 200 from the sideline. Then on the :09 or :10 candle it would be safe to enter another long trade after it has safely cleared the 200 SMA, then stay in until after the big green candle at :20. Sure you could eke out a few more ticks by staying in longer, but the risk vs reward grows. Notice it did achieve smaller and higher peaks after :22, but it became range bound between 0.9820 and 0.9845, while the 13 crossed the 20 and the MACD reversed.