EURGBP could be in for more gains as it picked up bullish momentum upon breaking past the neckline of its double bottom on the daily chart. The reversal pattern spans around 300 pips in height, so the resulting climb could be of at least the same size.

The 100 SMA is below the 200 SMA, though, so the path of least resistance is to the downside. The gap between the indicators is widening to reflect an increase in bearish pressure as well.

Price is now testing the dynamic resistance at the 200 SMA inflection point, and a break above this could draw more buyers in. However, RSI is already heading lower from the overbought zone to signal a return in selling pressure while stochastic looks ready to move south as well.

In that case, EURGBP could still revisit the broken neckline resistance that might now hold as support around .8600.

The ECB is due to make its monetary policy decision later in the week, although no actual changes to interest rates are eyed. Last week, several ECB policymakers already said that the current situation does not warrant further easing just yet.

Prior to this, mid-tier economic data are up for release and this could provide some reassurance that the overall economy is holding strong despite the coronavirus outbreak in Italy. However, disappointing figures could highlight vulnerabilities in the euro zone and prompt speculations of a rate cut soon.

There are no major reports due from the UK, so sterling could take its cues from overall sentiment and Brexit-related updates. So far, most headlines have been bearish for the pound as talks are breaking down and could expose the UK economy to more risks. Meanwhile, worsening coronavirus headlines could also drag sterling lower versus the euro which tends to enjoy some safe-haven flows.