EUR/GBP quickly reverses post-ECB gains, back around 0.8925

   •  A downward revision of the ECB's inflation forecast prompts some selling.
   •  Draghi's comments on FX risk add to the downward pressure.

The EUR/GBP cross faded a knee-jerk spike, closer to over 3-month tops, and quickly retreated around 25-30 pips from post-ECB swing highs. 

The ECB President Mario Draghi, during the post-meeting press conference, tried to halt the recent Euro appreciation by saying that inflation remains subdued and further downside risk includes FX. 

Meanwhile, a downward revision of the central bank's inflation forecast for 2019, now seen at 1.4% as compared to 1.5% previous, reinforced Draghi's cautious outlook and prompted some selling. 

Adding to this comments that the missing statement to increase the size of QE, if needed, was nothing out of context and was first introduced in 2016 further cooled down hawkish expected. 

Further downside, however, remained cushioned by persistent worries surrounding Brexit, which has been one of the key factors keeping the GBP bulls on the back-foot. 

It would now be interesting to see if bulls are able to regain their dominant position or some fresh long-unwinding trade would trigger a near-term corrective slide.

Technical levels to watch

A follow-through retracement below 0.8915 level, leading to a subsequent breakthrough the 0.8900 handle is likely to accelerate the fall back towards 100-day SMA support near mid-0.8800s.

On the upside, the 0.8950-60 region might continue to act as an immediate resistance, above which the cross seems all set to aim towards reclaiming the key 0.90 psychological mark.