Forex Flash: EUR/USD potential decline to 1.27 year-end – Scotiabank

FXstreet.com (Barcelona) - With the Greek problem (temporarily) fixed, euro bulls were getting ready for another run to the next key resistance around the 1.31 figure. But the upbeat tone after the deal was gradually transforming into a big wave of sell-orders. Fed's hawk Fisher came afterwards, and the improvement of the US Consumer Confidence to levels last seen in February 2008 completed the punishment. As a consequence, EUR weakness and USD strength have plotted a decline from 1.3010 to levels sub 1.2920, leaving the door open for further weakness into Wednesday.

Camilla Sutton, Chief Currency Strategist at Scotiabank, comments "There remains tremendous uncertainty for Greece, including filling in the details on the debt-buy-back and gaining approval from national parliaments& Accordingly, a EUR rally on the back of this was likely too optimistic. We expect EUR to drift lower into year-end, closing at 1.27".