• EUR/USD trades sideways above 1.0700 as investors look for fresh cues on the Fed and the ECB interest-rate outlook.
• ECB policymakers remain concerned over stubborn service inflation.
• Investors see the Fed reducing interest rates twice this year.

EUR/USD consolidates in a tight range above the round-level support of 1.0700 in Wednesday’s European session. The major currency pair trades sideways as investors look for fresh cues about when the European Central Bank (ECB) will deliver its second rate cut this year.

The ECB began reducing its key interest rates earlier in June as policymakers believe that inflation in the Eurozone is on course to return to the desired rate of 2%. However, ECB officials have been refraining from committing to any specific interest rate-cut path as they remain concerned over high inflation in the services sector.

ECB policymakers worry that the adaptation of an aggressive policy easing approach could revamp price pressures again. Officials have projected a bumpier inflation path and see price pressures declining to the 2% target in 2025.

Meanwhile, French political uncertainty continues to keep the Euro on the tenterhooks. Investors worry that the formation of Marine Le Pen 's-led-National Rally’s (RN) government after the Parliament elections would trigger financial distress in the European Union’s (EU) second-largest economy. The RN has promised a lower retirement age, energy price cuts, more public spending and "France first" economic policies in its manifesto.