Market participants brace for bearish reversals in EUR/USD and GBP/USD ahead of Thursday’s ECB meeting and important data releases from the U.S. and U.K. due on Friday.
The biggest question in the market this week will be whether ECB President Mario Draghi is keen to talk the euro down. While the ECB is not expected to announce any substantive change in policy, the press conference could bring significant bearing on flows in the euro. On Thursday we will know more and until then we might see the euro favoring a slight bearish tilt.
Elsewhere, the euro received some small boost from hopes of a grand coalition in Germany. The Social Democrats (SPD) voted to hold formal talks with the CSU/CDU block after months of uncertainty following last year’s election.
The U.S. dollar, on the other side, has largely shrugged off a government shutdown that began in the absence of a budget deal on Friday.
As for the pound sterling, U.S. dollar weakness and the rising prospects of an agreed Brexit deal have spurred bullish momentum in the GBP/USD. While the psychologically important 1.40-level could be a hart nut to crack for sterling bulls, chances are currently in favor of a minor setback. Important U.K. economic data is due on Wednesday with the U.K. labor market report followed by the GDP reading on Friday.
EUR/USD
The pair recently traded within a sideways trading range between 1.23 and 1.2165. We will now focus on price breaks above 1.23 and further 1.2365 in order to maintain a bullish stance. If the euro drops below 1.2165 it could fall towards 1.21 and further 1.2050. 
GBP/USD
Like the EUR/USD, the cable has been in a sideways trading range and traders should keep tabs on price breaks above 1.3950 or below 1.3740. 
Here are our daily signal alerts:
EUR/USD
Long at 1.2261 SL 25 TP 20, 60
Short at 1.2175 SL 25 TP 20, 50
GBP/USD
Long at 1.3925 SL 25 TP 20, 60
Short at 1.3830 SL 25 TP 20, 50
We wish you good trades and many pips!
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