As expected ECB kept the minimum bid rate the same, maintained the negative deposit rate and repurchases.
As I followed the media and news, coming up to the press conference it appeared that the market was expecting Draghi to be more accommodating and supportive, more importantly, to be more aggressive to easing if necessary.
So I decided just before the press conference when EURUSD was holding at 1.1226 to put in a straddle trade with the following details: –
Stop if Bid: 1.1250 with SL at 1.1220
Spot: 1.1226
Stop if Offered: 1.1190 with SL at 1.1220
When the press conference started, the EUR started coming off. As Draghi reiterated his position to keep an easy monetary policy, the EUR went further south.
Then, Draghi started talking about potential deflation and weak growth, and expressed concerns about emerging countries. He is clearly concern about China and let’s hope that G20 can uncover some of the mysteries that is unfolding in China.
At about 8:55pm, the EURUSD had already fallen all the way down to 1.1120, so I decided to take profit on half the position. Five minutes later, it went down to 1.1110, and I decided to sell the remaining position for an average of 1.1115 or 75bps trading profit with a trading size of $5Bn. IL Borro, Tuscany for Christmas.
This trade was long in coming and certainly helps to make up for the dull past 3 months, thanks to Greece!
Will we have another fun time come September 17th???!!!
What is BOE going to do next week?
Two more opportunities for this month.
The Panthenon Investment Group 