EUR/GBP Under Pressure Despite Bullish Bias

The EUR/GBP exchange rate is experiencing moderate losses against the British Pound on Wednesday. Despite failing to break above the 0.8575 resistance area on Tuesday, the pair remains within its upper range of the 0.8500s with a near-term bullish bias intact.

Rabobank's FX strategists warn that the Pound could come under pressure as markets reassess the UK policy outlook. They argue that 'the potential for disappointment over a lack of rate rises from the Bank this year, coupled with the likelihood of political friction over budget cuts,' may turn market sentiment less supportive for sterling.

Technical analysis suggests that bulls are targeting 0.8575 and the 0.8600 area. EUR/GBP is trading at 0.8566, hovering in the upper half of a bullish channel with momentum indicators in positive territory.