The EUR/GBP has found support at 0.7405 after the ECB announced that it was going to start purchasing government bonds in March through at least Sept. 2016.
Last week, EUR/GBP put in a price bottom after rallying back above 0.75. It started this week extending higher, and forming what appears to be a flag pattern.
There is immediate resistance just above, near 0.76. This is a previous consolidation low and where the 100-period SMA resides. Note that price is also testing the flag pattern resistance.
Above 0.76, 0.77 is key resistance area. There is a falling trendline, and a previous consolidation resistance area. Just below 0.77 there would also be a falling trendline coming down from the Jan. 2015 high at 0.7874.
To the downside 0.75 is a key support/resistance level and where the 50-period SMA resides. A break below would also clear the rising flag pattern and thus signal a bearish continuation to at least test the 074-0.7405 low with risk of breaking lower.
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