According to the Icelandic Met Office, the next few nights will offer a good chance to see the northern lights.
At the Met Office’s website, you can look up the aurora borealis forecast, rated on a scale of 0-9. The forecast calls for high auroral activity, rated 5, for tonight in South and East Iceland, where skies will be clear. Tomorrow night, the forecast rates the Aurora as active, or 4, all over the country, but Wednesday night looks the most promising, with very high auroral activity, rated 6, in most parts of the country. A cloud cover is expected to move into the northern parts of the country late Wednesday night.
Follow the aurora forecast on en.vedur.is.