Key Moments
- GBP/AUD traded at 1.9066 on Monday, just above last week’s 7-month low of 1.9025 amid persistent selling.
- The decline in 2026 stems from diverging monetary policies: Australia has restarted rate hikes, while the UK may cut further.
- Technical indicators show GBP/AUD is deeply oversold with an RSI of 27.78. The pair has stayed in oversold territory since January, showing the strength of the downtrend.
GBP/AUD Under Pressure Near Multi-Month Low
The pound weakened against the Australian dollar at the start of the week. GBP/AUD was quoted at 1.9066 on Monday, near last week’s 7-month trough of 1.9025. Selling pressure remains strong, with little sign of relief.
The Australian dollar’s strength has been broad, reflecting its outperformance in 2026. Meanwhile, sterling is under strain after last week’s sharp drop. These contrasting trends highlight the diverging paths of the two currencies.
Diverging Policy Paths Support AUD
The slide in GBP/AUD aligns with different interest rate outlooks. The Reserve Bank of Australia has resumed rate hikes, while the Bank of England is expected to cut rates further.
As a result, Australian assets appear particularly attractive, boosting demand for AUD. Investors see short-term opportunities amid the shifting policy landscape.
“AUD is uniquely positioned with a hiking cycle underway and net portfolio flows supported by strong fiscal metrics,” says JP Morgan. “FX hedging behavior also favors the Australian dollar.”
Capital Flows Favor Australian Short-Duration Assets
BNY Mellon reports strong inflows into Australia’s interest rate-sensitive assets, including cash and short-term instruments. Weekly flows now match levels usually linked to event risk or structural repricing. Investors are actively shifting capital toward these exposures.
“FX markets quickly price in policy pivots when inflation justifies them,” says Geoff Yu, EMEA Macro Strategist at BNY Markets. “Flows intensify when hawkish expectations are confirmed. Australia is the clearest G10 example of tightening.”
Technical Picture: Deeply Oversold but Still Falling
Technically, GBP/AUD remains entrenched in oversold territory. The Relative Strength Index is 27.78, below the 30 threshold that signals oversold conditions.
Typically, such readings suggest a corrective rebound. However, GBP/AUD has stayed oversold since January, showing the persistence of the downtrend.
The long period of oversold conditions highlights an aggressive selloff. Traders are advised to follow the trend, with expectations tilted toward fresh lows in the coming days.
Key Market Levels
| Metric | Value | Description |
|---|---|---|
| Current GBP/AUD level (Monday) | 1.9066 | Spot rate at the start of the week |
| Recent 7-month low | 1.9025 | Low reached last week |
| Relative Strength Index (RSI) | 27.78 | Indicates oversold conditions (below 30) |
Forward-Looking GBP/AUD Projections
Strong AUD demand, divergent monetary policies, and persistent technical weakness keep focus on forward-looking expectations. Traders track consensus year-ahead forecasts from over 30 investment banks to gauge potential paths for GBP/AUD.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
