Aug 022012

6E 09 12 (1 Min) 08.02.12

8/2/2012 ECB Minimum Bid Rate (0145 HI time / 0745 EDT)
Forecast: 0.75%
Actual: 0.75%
Started @ 1.2280
1st Peak @ 1.2312 – 0146 (1 min)
32 ticks

Reversal to 1.2289 – 0150 (5 min)
23 ticks

2nd Peak @ 1.2422 – 0236 (51 min)
142 ticks

Reversal to 1.2188 – 0306 (81 min)
234 ticks

Notes: The ECB decided to leave the Minimum Bid Rate unchanged at 0.75% in line with most economists expectations in the face of a possible but unlikely rate cut to 0.50%. The 6E initially rallied strongly for 32 ticks on the 1st peak and 142 on a drawn out 2nd peak before a dramatic reversal for almost double the magnitude of the rally. After the initial announcement was made at 0145, expectations fell on Mario Draghi to act on a bond buying program which had been discussed in advance. When he started his speech at 0230, the last bit of the rally climbed and then the air was let out of the balloon as he explained “his plan to promise a plan which plans to promise a solution” instead of action. The initial spike crossed all 3 major SMAs and peaked just below the R1 Pivot. The 2nd Peak eclipsed the R2 Pivot on the final push, then the reversal crossed all 3 major SMAs, the R1, PP, and S1 Pivots on its descent. With JOBB you would have filled at about 1.2289 with about 2 ticks of slippage, then had an opportunity to close out at about 1.2307 where it hovered for about 18 ticks