GBP/USD took advantage of the US Dollar's modest weakness on Tuesday and raced higher. Nonetheless, economists at ING expect Cable to struggle at the 1.20 level. EUR/GBP, meanwhile, is expected to continue its decline.

EUR/GBP to test 0.8600 in the coming days

“The extended correction in the Dollar is now pushing the Cable towards the 1.2000 gravity line. Expect some resistance around that level given the lack of strong domestic bullish drivers for the Pound though.”

“GBP’s greater sensitivity to risk sentiment compared to the Euro means that further improvements in global risk sentiment can push EUR/GBP to test 0.8600 in the coming days.”