Dollar under pressure

The greenback is still feeling the pinch ahead of the UK services data and ECB meeting today. 

Source: Bloomberg

Sterling still climbing
The pound is a touch higher versus the dollar this morning ahead of the UK services report at 9.30am (London time). The market is expecting a reading of 59.2 in May, and the April survey came in at 59.5. The UK construction PMI report came in higher than anticipated yesterday as the Conservative victory last month gave a boost to the industry. A strong services report will drive GBP/USD higher.

A broad decline in the dollar yesterday was triggered by comments from Federal Reserve member Lael Brainard. Ms Brainard stated the latest US economic data does not warrant a rate hike this month. As previously stated, it will be hard for the Fed to justify a rate rise in the near-future in light of the negative first-quarter growth quarters, and this will assist GBP/USD.

The pound is receiving support at $1.53 and if this mark is held the resistance at $1.54 will be in play. A move through that mark will put $1.55 on the radar. A drop back below $1.53 will bring the support at $1.52 into sight.

All eyes on ECB
The European Central Bank rate decision and press conference at 12.45pm and 1.30pm (London time) respectively will be the highlight of the trading session. Traders are not expecting any change to the interest rate, and the focus will be on the commentary from Mario Draghi afterwards. The growth outlook for the eurozone will be of major importance, and if Mr Draghi ups his growth forecast for the region this will boost EUR/USD.

The Greek situation is still rumbling away in the background. Even though the equity market is paying more attention to it than the currency market, traders will still be keeping an eye on it. There is a growing sense of confidence that a deal will be reached before the repayment on Friday.

The resistance at $1.12 is the upside target, and if that mark is taken out the next big barrier to EUR/USD will be $1.14. A correction in EUR/USD today will find support at $1.10. 

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