The US dollar strengthened on Monday (Feb 6) with the euro falling the most among majors against the US unit amid mixed data from Germany, while technical charts projecting EUR/USD parity coming back for traders' consideration.
USD/CHF rose to 0.9960 from the previous close of 0.9926 meaning a 0.34% slide in the franc. EUR/USD dropped to 1.0734, down 0.43% from Friday's close. GBP/USD fell to 1.2450 from 1.2483 before recouping most of the losses by mid-morning in London.
Technically, the euro is more poised to the downside rather than the upside despite a slight uptrend in place since January with the euro-dollar parity coming back again as a very near probability.
If the uptrend is continued, 1.0900 will be a key near term resistance and a beak of that will open doors to 1.1300 and then 1.1700, hitting the upper band of the broad sideways track since early 2015.
However, the big picture chart continues to highlight the downtrend since 2002, which if sustained, will easily take the single currency back to parity vs the dollar. The pair will first target 1.0600 and then 1.0400 before levelling versus the greenback.
Industrial orders in Germany went up 5.2% from a month earlier in December, following a 3.6% drop in November and beating market consensus of a 0.5% rise. It was the biggest increase since July 2014, driven by higher demand for capital goods, as per the official release.
At the same time, the retail sales picture was much weaker than expected according to an IHS Markit survey. The Retail PMI index dropped to 50.3 in January from 52.0 in December, the report on Monday showed.
"Worryingly, firms are simultaneously under pressure to reduce costs – the squeeze on gross margins intensified in January amid sharp purchase price inflation," said Philip Leake, Economist at IHS Markit.
The market is now waiting for a speech by the ECB President Mario Draghi later on the day. He is scheduled to give the introductory statement on the occasion of the ECON hearing at the European Parliament in Brussels.
According to a survey report by a research house released on Monday, more than 50% of British businesses say they have started experiencing negative impact after UK's exit from the European Union.
Ipsos Mori said its survey of more than 100 of the country's top 500 firms found that 58% felt the vote to leave had taken a toll. However, many of them also have specific programs in place to offset the impact, the report said.