Fundamental Market Analysis for 27.05.2026 (EURUSD, GBPUSD, USDJPY)

EURUSD

EUR/USD is trading near 1.1640 on Wednesday, May 27, after a moderate recovery, but the overall background remains mixed. The US dollar continues to receive support from cautious investor sentiment: new US strikes on Iran have reduced expectations of a quick agreement and the restoration of normal operations in the Strait of Hormuz. Against this backdrop, demand for the US currency remains steady, while the euro’s upside looks limited.

Additional pressure on the pair comes from expectations of new signals from the Fed. Market participants are watching comments from regulator officials and tomorrow’s US Personal Consumption Expenditures Price Index data, as higher energy prices may strengthen inflationary pressure. If the data confirms persistent inflation, the dollar will gain another reason to strengthen, while EUR/USD may continue to decline.

The euro receives partial support from the position of some ECB representatives, who allow for a rate hike in June due to the persistent energy shock. However, the eurozone economy remains vulnerable to expensive energy resources, so this factor does not shift the short-term balance in favor of the euro. As long as geopolitics supports the dollar, the preferred scenario remains a decline in the pair.

Trading recommendation: SELL 1.1640, SL 1.1670, TP 1.1550

GBPUSD:

GBP/USD is trading near 1.3450 on Wednesday, May 27, after pulling back from higher levels seen at the start of the week. The British currency remains under pressure due to the strengthening US dollar, as investors are taking a more cautious view of the prospects for a quick resolution of the conflict around Iran. New US strikes have worsened market sentiment, while stronger demand for the US currency limits the pound’s recovery.

The domestic backdrop for the UK is also mixed. The latest business activity data showed the composite PMI falling below 50, indicating an economic slowdown. Inflation slowed to 2.8% in April, but rising energy prices continue to create risks for households and businesses. The Bank of England is likely to act cautiously, so the pound is not receiving strong support from rate expectations.

The political factor is also holding back pound buyers after regional elections and discussions about the stability of the Labour Party leadership. At the same time, the pair’s short-term movement still depends on the dollar and news from the Middle East. As long as investors prefer defensive assets, GBP/USD remains vulnerable to further decline.

Trading recommendation: SELL 1.3450, SL 1.3480, TP 1.3360

USDJPY:

USD/JPY is trading near 159.25 on Wednesday, May 27, remaining close to the zone that the market views as sensitive for Japanese authorities. The US dollar is supported by geopolitical tension and demand for defensive assets, but further growth in the pair is limited by the risk of currency intervention. An approach toward the 160 level increases the likelihood of more active action from Japan.

An additional factor in favor of the yen is linked to expectations regarding the Bank of Japan. Governor Kazuo Ueda warned that the energy shock could become more persistent amid high inflation expectations and wage growth. The market is already pricing in a high probability of a rate hike at the June 15–16 meeting, while Friday’s Tokyo inflation data may strengthen these expectations.

Yen weakness persists due to Japan’s high dependence on imported energy, but the balance of risks near 160 looks unfavorable for new dollar purchases. Even with steady demand for the US dollar, the threat of intervention by the authorities and expectations of tighter Bank of Japan policy increase the probability of a downward correction in USD/JPY.

Trading recommendation: SELL 159.25, SL 159.55, TP 158.35

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