EUR/GBP: Strong bounce, double bottom?

FXStreet (Córdoba) - The euro rebounded sharply against the pound and rose more than 80 pips from the lows erasing weekly losses. EUR/GBP is testing a downtrend line from January highs and a break above could give more bullish momentum to the pair.

The euro gained strength during the last hours across the board as stocks failed to sustain the recovery and tumbled to fresh lows. The risk aversion environment boosted EUR/GBP, that was falling before on the back of data from the UK.

Tomorrow the Bank of England will release a statement with the decisions on monetary policy, the minutes of the meeting and the Quarterly Inflation report that is likely to impact on the pound.

EUR/GBP: Double bottom?

Three hours ago the pair bottomed at 0.7524 that is also the lowest level it reached two weeks ago. Today it bounced from the mentioned level but so far it has remain below 0.7600 but could have formed a double bottom. According to the double bottom pattern a break above 0.7660 could trigger a rally toward 0.7800.

Currently it trades at 0.7680/85, at the same level it closed yesterday. It hit a fresh daily at 0.7608 but so far it has been unable to hold on top of 0.7600.