"While a tactical short EURUSD spot position may well play out favourably over the next two weeks, we think the risk-reward would be more attractive to position for a more meaningful move lower later this year", BNPP advises.
European stock markets are in the red, after a mixed session in Asia.
Dow e-minis were up 34 points, or 0.16 percent, with 23,048 contracts changing hands. The downtrend this year remains firmly in place, with August's trading pattern resembling more of a consolidation phase than a significant rebound.
Although Yellen was initially expected to shed light on the market hopes of another interest rate hike, the recent Fed meeting dampened these hopes while European Central Bank President Draghi is also expected to not announce new policies during the conference.
Most of the major sectors ended the day showing only modest moves, contributing to the lackluster close by the broader markets. Retail sales, less gas and auto, also improved. Brent crude futures LCOc1 added 34 cents to $52 per barrel. Front-end volatilities in major currencies retain a bullish bias while on longer tenors, long-vega trades lose traction.
Yellen's speech on Friday will be closely watched for a steer on US monetary policy, given persistently low inflation, but central bank observers do not expect her to give new guidance on policy.
'This reticence to comment may also have something to do with the fact that there appears to some concern on the governing council about an overshoot to the upside for the euro, particularly given the recent weakness of the United States dollar'.
The broad-based S&P 500 gained 0.1 percent to 2,428.37, while the tech-rich Nasdaq Composite Index dropped 0.1 percent to 6,213.13. France's CAC 40 advanced 0.5 percent to 5,113.
Australian shares rose modestly, led by miners as iron ore and metals prices pushed higher and BHP Billiton returned to black with an annual profit.
USA inflation fell to 1.4% in June, based on the Fed's preferred gauge, and consumer prices in Europe are at 1.3%. Markit's preliminary Eurozone PMIs for August will come in on Wednesday, as well as the Eurozone's consumer confidence projection for August.
The upcoming Jackson Hole Economic Symposium will attract some market attention.
The greenback edged up to 0.7924 against the aussie, 0.7305 against the kiwi and 1.2572 versus the loonie, from its early lows of 0.7951 and 0.7335, and near a 3-week low of 1.2548, respectively.
Affecto shares have jumped in Helsinki after the data analytic and business intelligence services firm received an all cash takeover offer from CGI.
Antofagasta climbed 3.7% after its half-year profit surged by almost 90%, thanks to higher copper prices. Economists surveyed by The Wall Street Journal expect existing-home sales grew 0.7% in July. Leveraged trading is high risk and not suitable for all.
UBS strategist Manik Narain, however, argues that withdrawing quantitative easing (QE) in the euro zone won't hurt so much as the dollar process.
Bundesbank predicts Germany's Gross Domestic Product (GDP) will grow at a pace of 1.9% in 2017, but according to the latest report, Germany's growth could be even better than expected.