- A decision is news-induced liquidity: many orders land in the same minute.
- In the hour before, price tends to compress into a range. Stops rest just outside it.
- The first spike usually runs one edge of that range: a stop hunt.
- A five-minute candle that closes back inside the range says the hunt is done.
- The move that follows often belongs to the other side, and the press conference can add a second one.
- It does not always happen. Counted honestly, it closed back 64% of the time.
Why a decision is not like other news
Most of the time, price moves because orders arrive a little at a time. A rate decision is different: every trader, fund and algorithm that has been waiting for it acts in the same minute. We call that news-induced liquidity. For a short while there are far more orders than usual, on both sides, and the market has to find where they can be filled.
That is why the first reaction is so often violent and so often wrong. It is not a considered reading of the statement. It is a rush of orders going wherever there is something to trade against, and the places with the most resting orders are the stops that traders have left just beyond the recent high and low. Read the decision as a minute of liquidity first, and as information second.
This guide is built on 105 decisions of eight banks (Fed, ECB, BoE, BoJ, BoC, RBA, RBNZ, SNB), each measured on one-minute candles with the same rules every time. The rules are on the method page. The numbers say how often something happened. They do not say it will happen next time.
Step 1: the hour before
Before a scheduled decision, many traders stop trading. Spreads widen, volume thins and price tends to drift into a narrow range while everyone waits. We mark that range as a box: the high and the low of the 60 minutes before the announcement.
The box matters because of what sits just outside it. Traders who bought in the hour have their protective stops under the low; those who sold have theirs over the high. Those stops are orders waiting to be triggered, which is exactly what a burst of liquidity looks for. The median box across the 105 decisions was 14 pips wide, and the median first move after the announcement was 21 pips: the first spike is usually larger than the whole hour that came before it.
Step 2: the first spike is a stop hunt
At the announcement the first spike goes one way, fast, and runs past the edge of the box. This is a stop hunt: the stops beyond the edge are triggered, filling the opposite side's orders. The market is not saying anything about the decision yet.
In our counts the first spike left the box within 30 minutes in 104 of 105 decisions. In the other 1, price stayed inside the hour-before range for the first half hour. Where it did leave, the spike went through by a distance that is easy to measure and hard to trade by hand, which is the reason to wait for the next step.
Step 3: the close back
The signal is not the spike. It is what the market does when the orders run out. When a five-minute candle (counted from the announcement) closes back inside the box within 60 minutes of the announcement, the stops have been taken and price has refused the new level. We call that the close back.
It happened in 67 of the 104 decisions that broke the box, and 37 of them did not close back within the hour: the first move simply held. A rule that works 64% of the time on this sample fails the rest, and the failures are the large moves. Hold that thought for the mistakes section.
A textbook case: Fed, Sep 16, 2026
The Federal Reserve raised 25 bp to 3.75%–4.00%, as expected. The hour before the 2:00 PM EDT announcement ranged 8.8 pips on EUR/USD. The first spike went above the box by 7.7 pips, a candle closed back inside after 5 minutes, and within four hours price had traded through the low of the box: the other side.
One hour later the pair stood −68 pips from where it was before the announcement. The full decision, minute by minute.
Step 4: the other side
After a close back, the stops on one side are gone and the orders that were waiting on the other side become the next place to go. Often the move that follows runs the other edge of the box. Of the 67 decisions that closed back, price traded through the opposite edge within four hours in 42 (63%).
That is a count of what happened, not a promise. In 25 cases price closed back and then did not reach the other edge in four hours, and a trade taken at the close back would have been sitting on a stop or a slow drift.
When the first move holds: RBNZ, Oct 28, 2026
The read has a clear failure case, and a reader who never sees it will over-trade it. On Oct 28, 2026 the Reserve Bank of New Zealand held at 2.75%. The hour before ranged 11 pips. The first spike went below it by 93 pips and no five-minute candle closed back inside within the hour. An hour after the announcement the pair was −60 pips from where it started.
Here the first move was the move. No close back, no signal, no trade under this read. The discipline of waiting for the close is what keeps a trader out of the decision that simply runs.
The press conference: a second move
The statement is read in a second; the press conference takes an hour. The Fed's, for example, starts thirty minutes after the statement. A governor's answer can confirm the decision or soften it, and a phrase in an answer can move price as much as the rate did. When the press conference starts, the one-minute chart often shows a second burst of orders, with its own spike and its own question: has it closed back? The decision pages mark the press conference on every chart.
The result against the expectation
A currency does not rise because a bank hiked. It rises when the bank is more hawkish than the market expected. If the market expected 50 basis points and the bank delivered 25, a hike is a disappointment and price can fall. The same applies to the statement, the vote and, four times a year for the Fed, the dots.
In the 105 measured decisions with a consensus, the result matched it exactly 102 times, so for most decisions the number alone was not the news. When the result did differ and the first spike left the box (3 decisions), that first spike went the way the surprise pointed 3 times and the other way 0 times. Even a clear surprise does not guarantee the first move goes its way, because the first move goes where the stops are.
Next up is the European Central Bank, Thu, Oct 29 at 2:15 PM Frankfurt, with hold at 2.50% expected. Its preview has the standing highs and lows where stops are resting.
The counts for all eight banks
Every decision since Jan 24, 2025 that has one-minute candles, measured the same way. "Closed back" counts decisions, out of all of them, not only those that broke the box.