By FX Empire.com
The EUR/USD started the week with heavy volatility as eyes remain on the European continent and the progress being made to contain the debt crisis.
The market is still holding up and awaiting the final details from the leaders on Wednesday at the latest. The market is still optimistic after they saw progress being made and the leaders at least managed to narrow their differences on how to contain the crisis and present a final plan.
The EU already approved their part of the 8 billion euro tranche for Greece and also ruled out ECB involvement in the new expansion of the EFSF, yet the market remains highly volatile and uncertain and the volatility will prevail until the final details are provided.
The EU accepted the recommendations from the finance ministers over banks that need around 100-110 billion euros of capital, which the market found another progress to help banks.
We still see the uncertainty dominant as there are no sufficient details to judge if the plan will be strong enough or not, and accordingly investors remain skeptic and holding off from taking decisive decisions on the euro, which will be evident on Tuesday especially with the lack of major fundamentals.
Investors see narrowing chances for a rally on the measures since it is mostly priced in, yet a strong breakthrough will also see the euro stronger, especially a break above the strong $1.40 levels which will be strong for the euro and will extend the rally, otherwise we will see the market take the course and move lower on the measures if they are indeed inadequate since they already ran their course on the market.
Germany will report the Gfk Consumer Confidence for November at 06:00 GMT which is expected to weaken to 5.1 from 5.2.
The U.S. economy is set to release the Consumer Confidence for October at 14:00 GMT which is expected to improve to 46.0 from 45.4.
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