Will GBP/AUD avoid a pullback amid overbought signals and bullish Sterling momentum?

Traders Union
All News
Currency
Pound Sterling up 0.91% at A$1.9392

Highlights

Pound Sterling reached its highest trade-weighted level since the 2016 Brexit vote at 86.4, indicating broad global support for the currency.
GBP/AUD is supported by continued Sterling strength and recent comments from the Reserve Bank of Australia on weakening public confidence in inflation control.
GBP/AUD trades in a strong bullish trend with immediate support at A$1.9276, with a very high probability of remaining in the A$1.9295 to A$1.9489 range over the next 2 to 3 trading days.

Sterling demand surges as Brexit-era highs shift global flows

Pound Sterling has climbed to its highest trade-weighted level since the 2016 Brexit vote, with the Bank of England's index reaching 86.4, according to Ibtimes Co. This surge in Sterling demand reflects broad support for the currency and boosts GBP/AUD, as global currency flows tilt in the pound's favor. At the same time, the Reserve Bank of Australia has raised interest rates for the fifth time this year, but comments from its Deputy Governor regarding declining public confidence in inflation control, as noted by Investing.com, temper the Australian dollar's strength and encourage further Sterling outperformance.

Momentum signals persist as overbought risks threaten pullback

A$1.9392 currently sits above the MA-20 (A$1.9248) and MA-50 (A$1.9251) on the hourly chart, and above the MA-200 (A$1.9) on the daily timeframe. The Ichimoku Kijun level at A$1.9276 provides immediate support. MACD and ADX show active Buy signals, while RSI, Stoch RSI, and CCI are all in overbought territory, signaling the risk of a short-term correction or some near-term overheating. Bull/Bear Power remains positive at 0.0106, indicating prevailing buyer dominance intraday, and the Awesome Oscillator continues to support bullish momentum. However, persistent overbought readings raise the prospect of a possible short-lived pullback.

Bullish breakout favored as risks of reversal remain low

In the next 2–3 trading days, GBP/AUD is expected to move within a range of A$1.9295 to A$1.9489. There is a very high probability—more than 80%—that the pair will see another upward move, while the likelihood of a downward reversal is assessed as below 20%. The baseline scenario projects consolidation within this corridor, while a bullish case could see price breaking through the upper bound for accelerated gains. Conversely, a move below the immediate support could trigger a correction toward lower support levels.

Viktoras Karapetjanc, expert at Traders Union, sees sustained Sterling strength underpinning the GBP/AUD move. He notes that macro demand, highlighted by the trade-weighted index surge, is reinforced by Australia’s policy credibility concerns. The analyst believes these factors tip momentum further in Sterling’s favor over the near term. Price action above key averages and broad sentiment both support the bullish case. "With GBP demand at post-Brexit highs and macro flows on Sterling’s side, I expect GBP/AUD to edge higher in the coming days."

Earlier, analysts noted that GBP/AUD was exhibiting bullish technical momentum but cautioned that overbought conditions increased the risk of a short-term pullback. With renewed Sterling strength and ongoing technical signals supporting buyers, traders should monitor for potential volatility around imminent resistance as overbought readings persist.

Source of Data: GBP Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.