Having struggled with the $83 level for yet another week, oil finally collapsed under its own speculative weight Friday. Suffering the biggest daily decline in six weeks, crude has once again shown which direction volatility and momentum are better suited for. 

The forex market will likely see some volatility tonight, as Fed Chairman Bernanke is set to testify before Congress regarding the Fed oversight of America’s largest financial institutions. Bernanke is likely to argue that the Fed is best qualified to supervise U.S. banks in the wake of the global economic crisis. The reaction [...] Forex options markets volatility expectations have trended consistently lower through recent price action, suggesting currencies may remain in tight trading ranges in the week ahead.

The Euro tipped higher during the overnight trade to reach a high of 1.3701, and the single-currency is likely to face increased volatility going into the U.S. trade as the Federal Open Market Committee is scheduled to announce their interest rate decision at 18:15 GMT.

The Euro may see an outbreak of volatility as a survey of German investor confidence drops for the sixth consecutive month while EU finance ministers conclude a summit that promises to produce the blueprint for Greek bailout.