• GBP/USD initially dipped but recovered some ground on Thursday as investors assessed Middle East developments.
• Iran's supreme leader has issued a directive that the country's near-weapons-grade uranium should not be sent abroad, hardening Tehran's stance on one of the main U.S. demands at peace talks.
•The prolonged conflict has already pushed up oil prices and intensified concerns about inflation.
•Separately, S&P Global’s preliminary UK Composite Purchasing Managers’ Index for May dropped to 48.5 from 52.6 in April, marking the first reading below 50.0 since April 2025.
• The figure came in well below the 51.6 median forecast, with PMI readings below 50.0 indicating a contraction in activity.
•Weak business activity data contrasted with stronger recent indicators, as first-quarter GDP showed solid growth, while inflation slowed to 2.8% in April from 3.3% in March, coming in below the 3.0% forecast.
• Immediate resistance is located at 1.3469 (50%fib)), any close above will push the pair towards 1.3513(SMA 20)
• Strong support is seen at 1.3353 (38.2%fib) and break below could take the pair towards 1.3302(Daily low).
Recommendation: Good to sell around 1.3440, with stop loss of 1.3500 and target price of 1.3350
