EUR/GBP retreats back to 0.8900 handle post-ECB decision

   •  ECB leaves interest rates unchanged.
   •  Lowers the size of its bond purchase program to €30 billion per month.

The EUR/GBP cross extended its sharp retracement from levels beyond mid-0.8900s and is now headed to the lower end of daily trading range post-ECB announcement.

Currently trading around the 0.8900 handle, the cross met with some fresh supply after the ECB, on expected lines, left interest rates unchanged and decided to taper its billion monthly bond purchase program from current €60 billion to €30 billion per month. 

The market, however, seemed slightly disappointed from the fact that the central bank extended its QE program until September 2018. Barring the initial reaction, the cross lacked any strong follow through momentum as focus now shifts to the post-meeting presser - with explanations behind the decisions and the ECB President Mario Draghi's speech.

Technical levels to watch

Omkar Godbole, Editor and Analyst at FXStreet writes: "The upticks are likely to be short-lived. The daily below shows potential for a drop to 0.7852 (200-day MA). Only a break above 0.9226 would abort the bearish view on the monthly chart."