Although European leaders took a first step toward a fiscal union at the European Union summit late last week, the EUR will likely continue to be top-heavy in the near term as "the U.K. didn't join the deal and there were no signs of more aggressive buying of sovereign bonds by the European Central Bank," says Osao Iizuka, head of FX trading at Sumitomo Trust & Banking.

He says the outcome yielded few surprises. "The euro trading will remain susceptible to headlines," he says. "In the absence of ECB's increased bond buying, the downward trend for the euro is unlikely to change. There may be times when the euro rises (versus the dollar) by 100-150 pips, but...the euro will likely trend down on euro negative development going forward."

He adds, "the lack of unity (in the European Union, as suggested by the U.K. opposing the EU wide deal) is negative, but the impact of it should be limited since the U.K. is not a member of the euro zone."