Key events today:

06:00 UTC: GBP – Consumer Price Index (CPI).

The GBP/USD pair rose slightly on Tuesday, approaching the 1.3400 mark (but failing to break above it). The price remains in anticipation of key inflation and business activity data: on Wednesday, the UK Consumer Price Index (CPI) is scheduled for release, followed by a double batch of Purchasing Managers’ Index (PMI) reports from both the UK and the US on Thursday.

This week, trade news remains the key driver for global markets. Investors are still hoping for deals with the US that might encourage the Trump administration to pull back its tariff threats. However, the ongoing uncertainty is starting to weigh on bullish sentiment. The Trump administration is quickly approaching its self-imposed 90-day deadline for implementing a new round of retaliatory tariffs. While some potential trade deals have been announced, nothing concrete has materialized.

The UK April CPI inflation report is due early Wednesday. Market consensus expects the monthly CPI to rise to 1.1% m/m from the previous 0.3%. The annual CPI is also expected to increase to 3.3% from 2.6%. UK core CPI is projected to climb to 3.6% y/y from 3.4%.

On Thursday, both the UK and US will release PMI data. Markets expect a broad improvement in the UK forward-looking business activity indexes, while US data is likely to be mixed. The US manufacturing PMI for May is expected to fall slightly to 50.1 from 50.2, while the services component is expected to hold steady at 50.8.

Recommendation: BUY 1.3420, SL 1.3390, TP 1.3490.