Traffic controller about to enter continental city (7)
I believe the answer is:
cologne
'continental city' is the definition.
(city in Germany)
'traffic controller about to enter' is the wordplay.
'traffic controller' becomes 'cone' (item used to direct or control traffic).
'about' means one lot of letters goes inside another.
'to enter' becomes 'log' (logging is a kind of entering).
'cone' going around 'log' is 'COLOGNE'.
(Other definitions for cologne that I've seen before include "smells nice" , "European city" , "Foreign city" , "Perfumed liquid made of oils and alcohol" , "Refreshing scent" .)