• Euro starts Wednesday’s session slightly offered.
• Stocks in Europe open the session with decent advance.
• EUR/USD hovers around the 1.0950 region amidst risk-off mood.
• Germany’s Consumer Confidence worsens in July.
• Investors will closely follow events from the ECB Forum.

The recent two-day advance of the Euro (EUR) was somewhat limited due to renewed buying interest in the US Dollar (USD), leading to a partial retracement of the weekly gains for EUR/USD. As a result, the pair revisited the 1.0930 region early in the morning on Wednesday during the European session.

The stronger performance of the US Dollar also provided some relief to the USD Index (DXY), which had experienced negative performance earlier in the week. The index approached the 55-day SMA around 102.60.

The immediate reaction in the currency market can also be attributed to the lack of a clear direction in both the US and German bond markets. This uncertainty occurs amidst expectations of a quarter-point interest rate hike by both the European Central Bank (ECB) and the Federal Reserve (Fed) at their respective meetings in July.

The potential future actions of the Fed and the ECB in normalizing their monetary policies remain a topic of ongoing debate. This discussion takes place against the backdrop of increasing speculation about an economic slowdown on both sides of the Atlantic.

Regarding monetary policy, a notable event on Wednesday will be a Policy Discussion Panel at the ECB Forum on Central Banking in Sintra, Portugal. The panel will feature Chief Jerome Powell and ECB President Christine Lagarde, participating in the European afternoon.

In terms of data, consumer confidence in Germany, as measured by GfK, weakened to -25.4 for the month of July.

Across the Atlantic, the usual weekly Mortgage Applications tracked by the Mortgage Bankers Association (MBA) will be released, followed by preliminary figures for the Goods Trade Balance