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Sterling sits at the centre of its Australian dollar range, with even odds on the next leg.
The Pound to Australian Dollar exchange rate has settled into a state of equilibrium that leaves the next leg finely balanced.
The pair is at 1.8975, almost exactly at its flat 100-day moving average of 1.9014.
The 100-day sits in the middle of the range running from May's low at 1.8540 to July's high at 1.9362.
Spot at the 100-day signals equilibrium, which puts the September to October rebound at risk of losing momentum.
If the 100-day exerts a strong gravitational pull and suppresses volatility, consolidation is likely, though this pair rarely sits still for long.
We see even odds on whether the post-July selloff resumes or the rebound extends back towards the top of the 2025 range.
The rising 21-day average at 1.8915 is the first support, with 1.90 the near-term pivot.
Above: GBP/AUD at daily intervals with the 21-day and 100-day moving averages and the 2026 range.
Australian Jobs Data in Focus
Australia's September labour force survey is the main domestic release this week.
Westpac forecasts 20,000 jobs added and the unemployment rate holding at 4.6%.
"Participation near record highs continues to drive the unemployment rate higher, even as employment growth holds up. Slack looks set to keep building gradually into 2027," says Westpac.
Australia and the UK offer the highest real yields in G10, which makes both currencies attractive in their own right and helps explain the pair's balance.
Commonwealth Bank of Australia forecasts AUD/GBP at 0.52 into early 2027, equivalent to 1.9231 in GBP/AUD.
The bank sees the Bank of England hiking once in November against market pricing for around four hikes over the next year.
"We expect less interest rate increases from the BoE because the UK labour market is soft, which will help to limit the passthrough of higher energy inflation to wages growth and underlying inflation," says CBA.
A daily close above 1.9014 favours an extension towards 1.9362, while a break below 1.8915 reopens the 1.8750 area.
