EUR/GBP spikes to mid-0.8900s post-ECB announcement

   •  ECB leaves interest rates/QE unchanged.
   •  ECB drops pledge to increase the size of QE.

The EUR/GBP cross jumped around 30-pips and jumped to fresh session tops, around mid-0.8900s, in an immediate reaction to the ECB announcement.

The shared currency rallied across the board after the European Central Bank dropped an explicit pledge to increase the size of QE if needed, which was now seen as a hawkish signal. 

Meanwhile, the central bank decided to leave its key benchmark interest rates and the pace of monthly asset purchases unchanged at its monetary policy meeting held this Thursday.

Further gains, however, remained capped as investors wait for the central bank’s quarterly update of the economic projections, which along with the ECB President Mario Draghi's comments, during the post-meeting press conference, should infuse a fresh bout of volatility across the EUR crosses. 

Technical levels to watch

On a sustained move beyond mid-0.8900s, the cross now seems to surpass 0.8970 intermediate resistance and head towards reclaiming the key 0.90 psychological mark. On the flip side, 0.8935-30 area now seems to act as immediate support, which if broken might now turn the cross vulnerable to drop further towards the 0.8900 handle.