Trading Range

Expect the dollar-yen to trade in a range of Y95 to Y100 this week, with the euro-dollar trading between $1.25 to $1.3 over the same period.

Ashraf Laidi, chief market strategist at CMC Markets, said the next source of event risk for the euro is likely to take the form of an actual credit downgrade of a major euro-zone bank or the failure of an eastern/central European bank.

"Persistent risk aversion that is particularly provoked by euro-zone-related issues is expected to trigger a break of $1.24 and on to $1.2360," said Laidi. The euro's upside so far will be capped at $1.2830, he said.