On Friday, the pound fell sharply on disappointing U.K. retail sales data and traders are wondering whether the recent 1.2380-support will give way to fresh bearish momentum, driving the pound towards 1.23 and possibly even 1.2230. From the U.K., the most interesting piece of economic data this week will be Wednesday's Q4 GDP report and there is a possibility of an upwards revision to 0.7 percent from 0.6 percent. On Tuesday, traders will listen to a speech of Bank of England Governor Carney.
GBP/USD
The cable trended downwards and the focus is now on a break of 1.2380 or on the other side, a significant break above 1.25. However, we bear in mind that there is a lower support zone between 1.2350 and 1.23. The pound will therefore need to break the 1.23-mark significantly in order to reinvigorate fresh bearish momentum towards 1.2250/30. On the upside, the 1.25-level may limit potential gains in short-term time frames. 
Once again, the euro tested the 1.06-support and euro bears will once again wait for a break below the current support at 1.0580 and further 1.0560. With no major economic reports scheduled for release until Wednesday, the price action could be confined to a sideways trading range between 1.0650 and 1.0560. Bullish momentum may accelerate after a break above 1.0680, whereas a break below 1.0560 may increase bearish momentum towards 1.0470.
On Wednesday, euro traders should pay attention to the Eurozone Consumer Price report and if any headline of that report disappoints, we may see further losses in the EUR/USD.
The Federal Reserve releases minutes from its most recent FOMC meeting on Wednesday and dollar bulls are eagerly waiting for the U.S. dollar to resume its strength on recent hawkish Fed rhetoric despite the uncertain outlook. U.S. markets are closed today for Presidents Day. We therefore do not expect large market moves.
Here are our daily signal alerts:
EUR/USD
Long at 1.0680 SL 25 TP 20, 40
Short at 1.0580 SL 25 TP 20, 38
GBP/USD
Long at 1.2460 SL 25 TP 20, 40
Short at 1.2380 SL 25 TP 20, 40
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