EUR/GBP drops to session low of 0.7740 after ECB stands pat

The EUR/GBP pair dropped below 0.7750 level but held steady, trading with marginal loss at 0.7740 after the ECB left its main interest rate unchanged at 0.0%.

The ECB left the interest-rate on its main refinancing operations, the interest rate on the marginal lending facility and the deposit facility unchanged at 0.00%, 0.25% and -0.40%, respectively.

Just before the announcement, the cross was trading quite within a narrow trading range as traders waited for the key event risk to pass through before deciding on near-term direction for the pair. Investors, however, would still seemed resilient in taking a directional bet ahead of the ECB President Mario press conference and a possible revision to the central bank's inflation projections.

Given the uncertainty surround 'Brexit', the British Pound is expected to remain suppressed. This coupled with today's UK construction PMI missing consensus forecast and disappointing markets, might limit any near-term downfall for the EUR/GBP cross.

Technical levels to watch

From current levels, the pair seems to find immediate support near 0.7725-20 region, below which it seems to break below 0.7700 handle and head towards testing 0.7665-60 support area.

Meanwhile on the upside, the pair has made couple of failed attempts to break through 0.7775 level, which if conquered now should assist the pair to test 100-day SMA resistance near 0.7795-0.7800 handle. A follow through buying interest above 100-day SMA resistance would now pave way for additional up-move towards testing 50-day SMA resistance near 0.7845-50 region.