GBP/CAD Price Analysis: Struggle With 21-DMA Continues As Bulls Fight For Control

By Dhwani Mehta of FXStreet.com

Senior Analyst and Editor, FXStreet • May 25, 2021 at 7:00 AM EDT

GBP/CAD remains stuck in a tight range around 21-DMA. Daily RSI stays bearish, pointing to limited upside. The cross awaits fresh impetus to extend the rebound.

GBP/CAD is attempting a bounce above 1.7050 on Tuesday, snapping a three-day losing streak amid persistent strength seen in GBP/USD.

Markets shrug-off renewed Brexit concerns surrounding the Northern Ireland (NI) Protocol, as broad US dollar weakness continues to underpin the cable. Meanwhile, subdued price action in USD/CAD fails to have any impact on the cross.

Photo by Colin Watts on Unsplash

From a near-term technical perspective, the spot is looking to find acceptance above the 21-daily moving average (DMA), now at 1.7078.

Sellers continued to lurk above the latter over the past week, limiting the advances in the cross.

Therefore, daily closing above the 21-SMA would open doors towards a test of the 1.7100 round number. The next stop for the bulls is seen at the previous week high at 1.7155.

GBP/CAD daily chart

(Click on image to enlarge)

However, with the 14-day Relative Strength Index (RSI) still trending below the midline, it remains to be seen if the recovery momentum sustains.

A failure to hold above the 21-SMA hurdle could revive the bearish bets, knocking off the price back towards the 1.7030 support area.

A breach of the last would expose the 1.7000 psychological threshold.

GBP/CAD additional levels to watch

GBP/CAD

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