• Euro appears side-lined after two consecutive daily pullbacks.
• Stocks in Europe open the session on the back foot.
• EUR/USD bounces off lows near 1.0840 (June 23).
• Germany’s Business Climate surprises to the downside in June.
• Markets’ attention now shifts to the ECB Forum in Portugal.

After two consecutive daily retracements, the Euro (EUR) has regained some stability and rebounded from last week's lows near 1.0840 against the US Dollar, with its initial target being the key 1.0900 level. This positive start to the week for EUR/USD is in line with the renewed selling pressure on the Greenback, which has caused the USD Index (DXY) to retreat from its multi-day highs above 103.00 seen towards the end of last week.

Market participants are expected to closely monitor the annual ECB Forum on Central Banking in Sintra, Portugal, as well as a series of speeches by ECB officials, including President Christine Lagarde.

Regarding the ECB, investors are still anticipating another 25 bps rate hike in July, while the Federal Reserve is widely expected to follow suit, according to recent comments and testimony by Chair Jerome Powell.

On the broader macroeconomic front, the potential next steps by both the Federal Reserve and the European Central Bank in normalizing their monetary policies are the subject of ongoing debate, against the backdrop of increasing speculation of an economic slowdown on both sides of the Atlantic.

From the latest CFTC Positioning Report, speculators trimmed their net long exposure in EUR to levels last seen in early April around 144.6K contracts in the week leading to June 20, a period including the 25 rate hike by the ECB at its gathering on June 15.

In terms of data, the IFO Institute reported that the Business Climate in Germany fell to 88.4 in June from 91.7.