Forex analyst Gary Howes stated that EUR/GBP is on a downward trend, but there may be more volatility in the short term. In recent days, the euro against the pound has been hovering around the 9-day moving average (currently at 0.8327), and as long as it fails to break through, buyer interest will weaken.

A special resistance facing the pound is the prospect of a tight trading environment ahead of Friday's US employment report and next Tuesday's US presidential election.

Howes pointed out that the downturn of the euro against the pound may continue until the end of the year. However, the euro against the pound is sensitive to global investor sentiment. The strong US employment report may trigger some volatility, which could lead to the exchange rate breaking through 0.8333 over the weekend.

The possibility of Trump's re-election as president continues to rise, which is particularly unfavorable for most dollar based exchange rates, but it has not really affected the euro against the pound, so the US election is not the main risk for the exchange rate.

Speaking of special risks, the preliminary inflation data for October released by Spain and Germany on Wednesday may boost the euro. The September inflation data of these two countries led to a decline in the euro when it was released earlier this month, and two weeks later the ECB cut interest rates.

The market expects a slight rebound in inflation in these two countries by the end of the year, which, if confirmed, may have a buffering effect on the euro. On the other hand, lower than expected inflation data will only make people more convinced that the European Central Bank needs to accelerate interest rate cuts, which will put pressure on the euro.

For the pound, this is an important week as the UK government will announce the budget on Thursday. This may put pressure on the pound, especially if the market believes that new tax increases will lower the UK's growth potential.

However, analysis suggests that the budget will be expansionary as the Chancellor of the Exchequer has changed the UK's fiscal rules, allowing her to borrow more funds to invest in projects that can enhance the UK's growth potential.

Some predictions suggest that by 2025, the UK's economic growth rate may reach 0.50%, which will require the Bank of England to be more cautious when cutting interest rates, which will bring positive results for the pound.

EUR/GBP daily chart