Pound-Australian Dollar Rate Week Ahead Forecast: Correction Lower Could Stall and Rebound

The GBP/AUD exchange rate is steadily correcting the prior rally, but the overall ‘look and feel’ of the charts suggests a bias towards an eventual bullish continuation once the correction ends.

The Australian Dollar ceded ground to all its major rivals in the final session of the week after the Reserve Bank of Australia (RBA) gatecrashed celebrations of the improved prospects for a U.S.-China trade deal, reminding markets of the antipodean currency's debilitating vulnerability.

Headlines detailing fresh progress in ongoing U.S.-China trade talks have bolstered the Australian Dollar, which is one of the better performing major currencies at the time of writing on Thursday, November 07.

The decision to keep rates unchanged put a bid under the Aussie Dollar, and follows interest rate cuts of 25 basis points each at the June, July and October meeting.

The Australian Dollar clung to recent gains in the first session of the new week and could extend its earlier rally over the coming days if the Reserve Bank of Australia (RBA) signals a pause in its rate cutting cycle on Tuesday, according to strategists at ING Group, although upside is said to be limited by technical factors on the charts.

The GBP/AUD exchange rate is steadily pulling back after rallying but the ‘look and feel’ of the charts marginally favours an eventual bullish continuation once the correction ends.

The Australian Dollar was repelled from a three-month high Thursday by a Bloomberg News report cast doubt over the likely longevity of the October 11 ceasefire in the trade war between the U.S. and China, which is threatening the scuttle the antipodean currency although the charts still point to further gains ahead. 

The Australian Dollar advanced against all rivals Wednesday after official data confirmed a third-quarter pickup in inflation that was enough to see markets further rule out the already-low prospect of another rate interest cut from the Reserve Bank of Australia (RBA) in November.