GBP/CAD forecast for February 22, 2021

Looking at the chart on the weekly time frame, we see that the GBP/CAD pair is in a bullish trend after a break out of the triangle with the support of moving averages. By setting the Fibonacci retracement level on the chart, the GBP/CAD pair is currently testing the 38.2% level at 1.77230. Here we can expect potential consolidation at this level. We are still looking at higher levels on the chart towards 1.80000 psychological level. As a possible resistance, we look at the previous high at 1.78000 from March 2020, when the coronavirus crisis was at its peak.
On the daily chart, the picture is a little different, and we can draw a parallel growing channel, where the GBP/CAD pair is constantly close to the upper edge of the channel, and based on that, we can expect a short-term pullback within the channel. Moving averages are still on the bullish side and are quite at the lower levels on the chart. The last three candlesticks form the FLAG pattern, and it can push the pair even higher, closer to 1.80000. The first support below is at 1.76400, while the stronger support on the channel’s bottom line is at 1.75000.
In the four-hour time frame, we will follow moving averages where the GBP/CAD pair has good support in MA20, EMA20, and MA50, while MA200 and EMA200 are at even lower levels, maintaining better support 1.75000. A break below the MA50 may give us doubt about the continuation of the bullish trend, while a break below the MA200 is a sure sign of a black scenario for the pound.
From the news for these two currencies, we can single out the following: The order books of British manufacturers improved in February, and production fell slightly, but at a more moderate rate than in the first lock, showed the Industrial Trends Survey of the Confederation of British Industry on Friday. In the three months to February, production volumes fell at a moderate rate of -8 percent versus -2 percent in January. “Production activities remain uneven, but it seems to have hit a smaller blow so far than in previous blockades,” said Alpes Paleja, a leading CBI economist.
Private-sector production in the UK fell only slightly in February, reflecting the near-stabilization of service activities amid continued recovery in manufacturing, a closely monitored survey showed on Friday. The Covid-19 pandemic in February had a serious impact on the service sector. Nonetheless, the procurement manager index advanced to 49.7 from 39.5 in the previous month. The expected result was 41.0. The reading indicated the mildest rate of decline since the current phase of contraction began in November 2020.