Pound-to-Dirham Week Ahead Forecast: Well Supported at 5.0
- Written by: Sam Coventry
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The pound to dirham exchange rate (GBP/AED) retains a constructive setup as it enters the new week, with price action suggesting the recent consolidation phase has laid the groundwork for further gains.
GBP/AED opens around 5.0150, placing it near the midpoint of last week’s range and comfortably above the psychologically important 5.0 handle.
Previous trading patterns show consistent buying interest emerging around 5.00, a level that should continue to act as support in the coming sessions.
From a technical perspective, the structure remains positive: spot is trading above the 21-day moving average at 5.00 and the nine-day moving average at 5.0104, signalling that short-term momentum remains aligned with the broader uptrend.
Only when the nine-day moves below the 21-day would we shift gears from higher to lower.
With this in mind, the pullback from 5.0800 to 4.96 appears to have been corrective, allowing previously overbought conditions to unwind rather than marking a trend reversal.
The subsequent stabilisation around the 5.0 level reinforces that interpretation.
From here, a gradual move higher toward 5.04 is possible if supportive conditions persist.
The overarching macro theme of a longer-running U.S. dollar selloff remains intact, which mechanically weighs on the dirham given its peg to the dollar.
However, the key risk to this outlook would be a more forceful USD recovery driven by robust U.S. data.
Last week, the dollar showed a limited response to better-than-expected releases as investors continued to trim USD exposure, particularly amid the AI-linked technology selloff that has fed into broader “U.S. risk premium” concerns.
Should those headwinds fade and attention return to underlying U.S. economic resilience, the dollar could track higher, placing renewed pressure on GBP/AED.
Week Ahead Forecast - Highest Probability
- Support expected around 5.00
- Early-week consolidation likely between 5.00–5.03
- Upside bias toward 5.04
- Only a decisive break below 5.00 would shift the near-term outlook lower
Strategic Overlay: GBP/AED Payments
With 5.00 acting as a clear technical floor and the bias tilted toward a grind higher, those needing to buy dirhams (sell GBP) can afford to be patient and look to transact on strength toward 5.03–5.04.
Those needing to sell dirhams (buy GBP) face greater near-term risk in this setup and may wish to secure cover while the pair holds above 5.00, as a renewed USD recovery could quickly push GBP/AED back into the 4.90s.
Get in touch with our partners at Horizon Currency to discuss your needs.