No important events are expected today.

The pair is trading near 1.3450 on Wednesday, May 27, following a pullback from the higher levels seen at the beginning of the week. The British currency remains under pressure due to the strengthening of the US Dollar, as investors more cautiously assess the prospects for a quick resolution of the conflict surrounding Iran. New US strikes have worsened market sentiment, and the rising demand for the American currency is limiting the Pound’s recovery.

The domestic background for the UK is also mixed. The latest business activity data showed the composite PMI index dropping below the 50 mark, indicating an economic slowdown. Inflation in April decreased to 2.8%, but rising energy prices maintain risks for households and businesses. The Bank of England is likely to act cautiously, so the Pound is not receiving strong support from interest rate expectations.

The political factor further restrains Pound buyers following regional elections and discussions regarding the stability of the Labour Party leadership. At the same time, the pair’s short-term movement continues to depend on the Dollar and news from the Middle East. While investors prefer safe-haven assets, GBP/USD remains vulnerable to further decline.

Recommendations: SELL 1.3450, SL 1.3480, TP 1.3360.