Sep 052012

6C 09 12 (1 Min) 09.05.12

9/5/2012 BOC Rate Statement / Overnight Rate (0300 HI time / 0900 EDT)
Forecast: 1.00%
Actual: 1.00%
Previous Revision: n/a
Started @ 1.0115
1st Peak @ 1.0129 – 0302 (2 min)
14 ticks

Reversal to 1.0083 – 0420 (80 min)
46 ticks

Notes: The BOC left interest rates unchanged and reiterated that an increase may be needed as domestic spending is increasing with weak global demand for exports. This matched the forecast of leaving the rate unchanged, so the market initially reacted long with a 14 tick spike on 2 bars, but the talk of future rate hikes drove the bears to sell over the next 80 min, keying a strong reversal of 46 ticks. With JOBB, you would have filled long with minimal slippage at about 1.0123. The initial spike crossed all 3 SMAs and only climbed 10 ticks on the :01 bar. I would set my sell limit at the S1 Pivot and exit there with 4 ticks. It briefly eclipsed that area, then could not climb any further, falling into a measured drawn out dive that rode the 20 and 13 SMAs for nearly 90 min.