GBP/EUR Hits Key Support Level as Budget Looms

The Pound Sterling has lost its 100-day moving average and is trading below a key support level ahead of the UK Budget on October 28.

GBP/EUR currently trades at 1.1632, which is below the 100-day moving average of 1.1639, marking a significant technical shift in the market.

The narrowing UK interest rate advantage over the Eurozone and the upcoming fiscal squeeze are contributing to the Pound's weakness, leaving it vulnerable to further declines.

According to Kit Juckes, FX Strategist at Societe Generale, 'the key event in the coming weeks is really the Budget' and 'fiscal austerity in the UK could cast doubt about the UK outlook.'