Pound-to-Australian Dollar Week Ahead Forecast: Oversold

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The pound to Australian dollar exchange rate (GBP/AUD) can recover some of its recent losses this week.

GBP/AUD is finding its feet at 1.9751, having reached oversold conditions last Friday.

GBP/AUD dropped to a new 11-month low at 1.9678 on Friday after the latest pulse in a strong across-the-board AUD rally.

That saw the RSI on the GBP/AUD's daily chart hit 30, a signal that downside momentum had reached an extreme.

The RSI is mean-reverting, meaning it has a strong tendency to recover from 30.

For that to happen, the spot exchange rate must necessarily rise or simply consolidate.

This underpins our GBP/AUD Week Ahead forecast this week: look for that consolidation at 1.9678.

Resolution from the consolidation will likely be lower as our rules-based analysis means we must respect the trend that took us into the consolidation.

The charts are overwhelmingly in favour of GBP/AUD downside and new one-year lows are close at hand.

This as the AUD advances against all G10 rivals in 2026, with markets confident the Reserve Bank of Australia will raise interest rates sooner rather than later.
This will bolster Aussie interest rate-linked products in the eyes of international investors.

AUD has also proven a relative 'safe haven' when U.S.-Europe tensions are elevated, as was the case last week when President Donald Trump make it clear he wants to take Greenland.

Commodities are also surging in value, helping major commodity exporters such as Australia.

"Gold surged past $5,000/oz, silver approached $110 and the dollar was roundly offered as the relentless quest for hard assets continued amid yet more talk of tariffs and US government shutdowns, whilst talk of potential intervention in the yen rattled FX markets to send the dollar sharply lower to lend some extra support to gold and silver," says Neil Wilson, an UK Investor Strategist at Saxo Bank.