During Thursday's European morning session, the euro maintained a positive trajectory against the British pound, trading near the 0.8715 level. The pound faced downward pressure primarily due to heightened domestic political risks in the UK. A by-election is scheduled to be held in the Manchester Gorton and Denton constituency to fill a vacant parliamentary seat.

This election is viewed as a significant test of public support for UK Prime Minister Keir Starmer's administration. Market participants are concerned that a substantial defeat for the ruling Labour Party could trigger worries about the nation's political stability, potentially exerting further negative influence on the pound.

Concurrently, underlying pressures persist within the eurozone. Recent data indicated that the eurozone's inflation rate fell to 1.7% in January, reaching a 16-month low. This figure has reinforced market expectations that the European Central Bank may maintain a relatively accommodative monetary policy stance.

Subsequent commentary from ECB President Christine Lagarde will be closely monitored by investors. However, the euro's potential for appreciation may be constrained by upcoming German inflation data. Markets are awaiting the preliminary German CPI figures to gauge the future pace of monetary policy easing. A further slowdown in inflation could increase selling pressure on the euro.

From a technical perspective, the EUR/GBP pair remains within a broadly range-bound but slightly bullish structure. The price is currently trading above its short-term moving average system, indicating a slight advantage for bullish positions. The RSI indicator resides in the 50-60 range, suggesting mildly positive momentum without a clear trend breakout.

Immediate support is observed around the 0.8680 area, which represents the lower boundary of the recent trading range. A break below this level could lead to a further test of support near 0.8640. Resistance is positioned in the 0.8750-0.8780 zone; a decisive breakthrough above this area might pave the way for a challenge of higher levels around 0.8830.

The current movement of EUR/GBP is primarily influenced by the interplay between UK political risks and eurozone inflation expectations. While the pound is weighed down by political uncertainty, the euro's gains are capped by anticipations of central bank easing. In the short term, the exchange rate is more likely to maintain a range-bound pattern.

Should political risks intensify or German inflation figures fall below expectations, EUR/GBP could strengthen further. Conversely, if the European Central Bank signals a more dovish policy stance, the pair may experience a corrective pullback.