* Sterling near 3-month high after Draghi comment on rates
* Faces stiff resistance at 84 pence per euro and at $1.56
* BoE seen on hold this week after solid UK data
By Jessica Mortimer
LONDON, May 7 (Reuters) - Sterling steadied close to a three-month high against the euro on Tuesday, buoyed by firmer UK data and further hints of more interest rate cuts from European Central Bank President Mario Draghi.
Analysts said the pound may need more evidence of a strengthening economic recovery to push past strong chart resistance at 84 pence per euro and $1.56 against the dollar.
The euro was up 0.1 percent at 84.22 pence, hovering just above a three-and-a-half month low of 83.98 pence, with traders reporting talk of bids at 84.00 pence that helped stem any falls.
The euro looked vulnerable to more falls after Draghi reiterated the ECB's readiness to cut interest rates again, including taking the deposit rate below zero, after it cut the refi rate last week.
"We've seen a big switch in sentiment towards being cautiously optimistic on the UK economy, but we may need to see further confirmation in the data that the recovery is continuing," said Jeremy Stretch, head of currency strategy at CIBC.
"(The euro at) 84 pence and $1.56 against the dollar are significant levels that will be tough to break through."
The pound was steady against the dollar at $1.5536. It stalled just shy of $1.56 on Monday and resistance at $1.5606, the 50 percent retracement of its slide between January and March, and at $1.5607, the three-month peak hit on May 1.
Analysts at Morgan Stanley (Xetra: 885836 - news) said in a note to clients that sterling's failure to sustain gains above $1.5600 left it "vulnerable to a test of the lower end of the trading range in the 1.5480 area".
Data showing the UK economy comfortably avoided slipping into recession in the first quarter, and solid surveys on services and manufacturing activity for April have lifted the pound and tempered talk of more Bank of England monetary easing.
The central bank, which meets on Thursday, is widely expected to leave interest rates and its bond-buying target unchanged, and investors may have to wait until next week's quarterly inflation report for guidance on the policy outlook.
The next major British economic indicator is March industrial output data due on Thursday.