Jul 052012

6E 12 12 (1 Min) 07.05.12

7/5/2012 ECB Minimum Bid Rate (0145 HI time / 0745 EDT)
Forecast: 0.75% (0.25% cut)
Actual: 0.75% (0.25% cut)
Started @ 1.2529
1st Peak @ 1.2498 – 0146 (1 min)
31 ticks

Final Peak @ 1.2396 – 0241 (56 min)
133 ticks

Reversal to 1.2426 – 0255 (70 min)
30 ticks

Notes: The ECB decided to cut the Minimum Bid Rate 0.25% to 0.75% in line with most economists expectations in the face leave rates unchanged. The 6E predictably sunk into a downward fan as the currency was devalued for 31 ticks on the 1st peak and 133 on the final peak nearly an hour later. Then we saw a small corrective reversal of 30 ticks before it fell again and traded sideways. Not much mystery here…a cut was expected and acted on. The press conference also explained the rate cut and the reasoning – all bearich news for the 6E. The initial spike was sitting on all 3 major SMAs and the S1 Pivot in a tight fist, then crossed the S2 and S3 Pivots on the descent. With JOBB you would have filled at about 1.2518 with about 4 ticks of slippage, then had an opportunity to close out at about 1.2506, but I would stay in for the long haul since a cut was executed. Close out when the MACD crosses and it is able to rebound above the 20 SMA at about 0248 – 0251 at 1.2415 for over 100 ticks.