GBPUSD drops below 1.3500 – will the correction continue?

The GBPUSD pair fell below the 1.3500 level amid US dollar strength and tensions between the UK and the IMF. Discover more in our analysis for 28 May 2025.

GBPUSD forecast: key trading points

• Market focus: the FOMC May meeting minutes will be released during the US session today
• Current trend: correcting downwards
• GBPUSD forecast for 28 May 2025: 1.3450 and 1.3600

Fundamental analysis

The GBPUSD rate is declining on Wednesday, pressured by information about tensions between the IMF and the UK. In its annual review, the IMF urged the British government to adhere to fiscal rules, warning that failure to do so could provoke negative market reactions and higher borrowing costs.

All eyes are now on the release of the Federal Reserve’s May meeting minutes during the US session. Markets are looking for signals about the timing of the next rate cut. Depending on the regulator’s comments, market volatility could spike.

GBPUSD technical analysis

On the H4 chart, the GBPUSD pair is undergoing a downward correction after last week’s strong rally. The Alligator indicator has turned downwards, confirming the potential for further correction. The key support level for the current uptrend now stands at 1.3450.

The short-term GBPUSD forecast suggests that the pair may climb to the 1.3500 resistance level and higher if bulls hold above the 1.3450 support level. Conversely, if bears gain a foothold below 1.3450, a downward correction could follow, with the next downside target at 1.3400.

Summary

The GBPUSD pair has dipped below 1.3500 amid US dollar strength and IMF warnings directed at the UK. Market participants are now awaiting the release of the FOMC minutes for further guidance.