Many economists forecasts further tightening of the Fed's monetary policy. At least the strong labor market in the United States allows for this, and inflation remains unacceptably high, considering the Fed's target level of 2%. Today, economists and market participants will have new food for thought on this matter when fresh statistics on business activity in the U.S. services sector are published at 13:45 and 14:00 GMT. The next Fed meeting will take place on June 13th and 14th, and weak ISM and S&P Global reports on business activity may lead the leaders of the U.S. central bank to refrain from raising interest rates, which, in turn, could have a negative impact on the dollar.

As for the main competitor of the dollar in the forex market, the euro is strengthening in major cross pairs today but weakening against the dollar. Thus, as of writing, the EUR/USD pair was trading near the 1.0685 mark, which represents a key support level.

The euro failed to find support from the published final releases of data on business activity in the eurozone and several of its key economies at the beginning of today's European trading session. Mostly, the PMI indicators came out with values worse than the preliminary data, although they remained above the 50 level, which separates business activity growth from its slowdown.

It is also worth noting that the Eurozone economy, according to some economists, has already slipped into a recession. As a reminder, Germany's GDP fell from -0.4% to -0.3% in the first quarter and from +0.3% to -0.2% (year-on-year) with a preliminary estimate of +0.2%. Economists believe that the transition of the main economy of the Eurozone into a recession, as indicated by macro data, can have a negative impact on the stability of the entire Eurozone economy. This is also negative for the euro, although the current dynamics of the EUR/USD pair is mainly determined by the movement of the dollar.

From a technical point of view, a breakthrough of the 1.0685 support level and further decline will result in the return of EUR/USD to the zone of medium-term and long-term bearish markets.

We are also awaiting the speech of ECB President Christine Lagarde at 13:00 (GMT) today. Her unexpected statements regarding the prospects of the ECB's credit and monetary policy may cause increased volatility in euro quotes and, accordingly, in the EUR/USD pair. And possible "hawkish" statements favoring further rate hikes by the ECB may support the euro in the short term.