In this video John Hardy analyses the outcome of the all-important EU Summit and if the new EU Treaty will work wonders or leave Europe high and dry.

The EU Summit saw politicians battle it out in an attempt to help a struggling Europe get back on its feet and on the road to recovery. But the battle has so far exposed some dissidents, with the UK standing out the most and making one wonder if the UK is on its way out of the EU. An EU Treaty without the support of all members is a tenuous situation, says John Hardy.

Nevertheless the nations still committed to the cause are willing to keep up their efforts and hopes are now set on the new treaty plus revised funding structures. But there are still several questions about where the money is really going to come from. As John points out there is still a pressing liquidity problem in Europe and even though the European Central Bank announced new liquidity enhancement measures they are hardly considered enough and neither is the idea of bringing the European Stability Mechanism forward.

In the meantime the ECB’s hands are tied due to its mandate so bond buying is out of the question and even if more rate cuts come they will do little help, adds John.

All in all the events have done little to help the EURUSD which could break the 1.32 level by year end though as always the headline risks abound, he says.

See more of John's commentary on TradingFloor.com