How to rotate UI element with Mouse

Hello Unity Users!

I'm struggling with a problem i cannot seem to find an answer to, despite looking for a few hours now.

Basically i want to have a UI sprite which will have a circle on it and i want to be able to rotate it with mouse drag.

UI canvas is set up for using screen space - overlay. I cannot seem to be able to transfer mouse position on to the rotation of the UI element.

I have this code from another possible solution attached below but it doesnt work as it's using world mouse position i think:

     public float rotationSpeed = 8;  //This will determine max rotation speed, you can adjust in the inspector
 
     void Update() {
         //If you want to prevent rotation, just don't call this method
         RotateObject();
     }
 
     void RotateObject() {
         //Get mouse position
         Vector3 mousePos = Input.mousePosition;
 
         //Adjust mouse z position
         mousePos.z = Camera.main.transform.position.y - transform.position.y;
 
         //Get a world position for the mouse
         Vector3 mouseWorldPos = Camera.main.ScreenToWorldPoint(mousePos);
 
         //Get the angle to rotate and rotate
         float angle = -Mathf.Atan2(transform.position.z - mouseWorldPos.z, transform.position.x - mouseWorldPos.x) * Mathf.Rad2Deg;
         transform.rotation = Quaternion.Slerp(transform.rotation, Quaternion.Euler(0, angle, 0), rotationSpeed * Time.deltaTime);
 
     }

Please help! Best, Wojtek