GBP Australian Dollar Exchange rate and NewsThe expectation of lower interest rates in Australia and the slowing of the Chinese economy are both weighing on the Australian Dollar but not enough to see it weaken against the Pound.

Sterling is under pressure; you can see it in the correction from A$ 1.62 to A$ 1.54 in the last 3 weeks or so and the charts suggest we will see a further deterioration in the Sterling Australian Dollar exchange rate over the days ahead.

A target of A$ 1.5375 is highlighted by the 50% Fibonacci retracement and by the 200 day moving average. However, the caveat is that this all depends on what happens in Europe. Greece didn’t in fact vote itself out of the Eurozone for now but Spain may still drown in its own debt.

GBP Australian Dollar chart

GBP Australian Dollar chart – Click to expand

Such uncertainty is likely to weaken the Aussie Dollar. Whether that will result in a rise in the Sterling – Australian Dollar exchange rate depends on whether the UK chancellor’s new growth plans gain the traction he hopes they will and on the many and varied data releases due from the UK this week.

According to Sean Callow from Westpac: “The tide seems to have shifted again on GBP/AUD, with sharply divergent economic data likely to see the pair extend its decline to 1.5200,” Sean says, adding: “Near term upside risks on European events (e.g. Syriza winning the Greek election) to above 1.58 would present a selling opportunity.

Those willing to bet on a market-friendly Greek outcome should look to sell GBP/AUD around current levels.