EUR/GBP pares modest intraday gains and rises modestly around 0.8780 after ECB

• EUR/GBP pared much of its intraday gains at levels just above 0.8800.
• The ECB raises its reference rates by 50 basis points, although it fails to provide a significant boost.

The pair EUR/GBP it fails to capitalize on its strong intraday gains beyond 0.8800 and is down a few points from the daily high reached in the middle of the European session. The cross moves shortly after the European Central Bank (ECB) announced its policy decision and is currently trading around the 0.8780 area, up less than 0.10% on the day.

At the end of the March monetary policy meeting, the ECB raised its key rates by 50 basis points, raising the main refinancing operations and the interest rates of the marginal credit facility and the deposit facility to 3.5%, 3.75% and 3%, respectively. In the accompanying monetary policy statement, the central bank noted: “the high level of uncertainty reinforces the importance of a data-driven approach to ECB policy rate decisions, which will be determined by its assessment of the outlook.” in light of incoming economic and financial data, core inflation dynamics, and the strength of monetary policy transmission.”

Short of any big surprises, be they mild or hawkish, the decision is not a significant boost to the shared currency or the EUR/GBP cross. Meanwhile, growing acceptance that the Bank of England (BoE) will pause its rate hike cycle next week continues to undermine sterling and helps sterling hold above support at the 100-day SMA.

Technical levels to watch