The pound remained strong against the dollar in early Asian trading on Friday, trading around 1.3645. The pound has received some support due to the dollar's recent pressure from weak US economic data and easing expectations of a Federal Reserve rate hike. Market attention is now focused on UK July retail sales data, which will provide new insights into UK consumer spending, economic growth, and the future path of monetary policy. In the US, recent economic data has not provided sustained support for the dollar, leading to a decline in market expectations for further tightening by the Federal Reserve. Interest rate market data shows that investors currently expect a 64% probability of the Fed maintaining interest rates unchanged in September, and a 36% probability of a rate hike. While a rate hike remains a possibility, it is lower than previously high levels, thus weakening the dollar's interest rate advantage. It is worth noting that rising US Treasury yields do not necessarily mean a stronger dollar. Market analysts believe that if rising yields primarily reflect US fiscal risks, increased government financing needs, or persistent inflation, rather than stronger economic growth or a significant tightening of monetary policy, then the support for the dollar from rising bond yields may be limited. The core issue facing the dollar now is whether the market can interpret rising US Treasury yields as a sign of a strong US economy, or as a result of rising fiscal and inflation risks. Recent remarks by Fed official Mussalim have released relatively complex policy signals. He believes that current financial conditions remain relatively loose, and that underlying inflation at around 2.5% to 3% is still high. He also pointed out that if inflation cannot sustainably fall towards the 2% target, tightening policy in advance may help avoid more aggressive measures in the future. This means the Federal Reserve has not completely ruled out a rate hike, but still hopes to obtain more data for confirmation before its September meeting. In the UK, market expectations for the Bank of England's future policy path are stabilizing. Most economists expect the Bank of England to maintain its policy rate at 3.75% for the remainder of the year. However, recent weak inflation and employment data in the UK have reduced market bets on further rate hikes. Analysts at Danske Bank pointed out that the latest inflation data, combined with previously weak employment data, has weakened market expectations for further tightening by the Bank of England. This means that the recent rise in the pound is more dependent on a weaker dollar and changes in risk appetite, rather than a clear shift towards a hawkish stance by the Bank of England. Therefore, the UK's July retail sales data is a crucial short-term catalyst. The market expects UK retail sales to decline by about 0.5% month-on-month in July, lower than the 1.0% growth in June. If the actual data is significantly weaker than expected, it will further reinforce the assessment of a slowdown in UK economic growth and may push the market to lower its expectations for UK interest rates again, thus putting pressure on the pound. Conversely, if retail sales are significantly better than expected, the market may believe that UK consumer demand remains resilient, providing further support for the pound. From a global market perspective, the pound sterling against the dollar is also influenced by the overall trend of the dollar and changes in the global bond market. If US economic data remains weak and the dollar index falls further, the pound may remain relatively strong even with cooling expectations for Bank of England policy. Meanwhile, if US inflation rebounds and prompts the Federal Reserve to reconsider raising interest rates, the dollar could rebound rapidly, putting pressure on the pound. Currently, market sentiment towards the pound is generally positive, but the upward trend is beginning to show technical risks. After a continuous strengthening of the exchange rate, short-term buying concentration has increased. If UK retail sales fall short of expectations, or the dollar rebounds due to improved US economic data, the pound may experience significant profit-taking. Going forward, key factors to watch include UK retail sales, US economic data, speeches by Federal Reserve officials, and changes in US Treasury yields. If UK data remains resilient while the dollar continues to weaken, the pound sterling against the dollar is expected to continue testing previous highs; if UK economic data weakens and US inflation risks rise again, the exchange rate may enter a correction phase. From a daily chart perspective, the GBP/USD pair maintains a clear bullish trend, with the price trading above the 100-day simple moving average and the 20-period Bollinger Band middle line, indicating that the medium-term uptrend structure remains intact. Currently, the price is approaching the upper Bollinger Band around 1.3665, and the 14-day RSI is around 71, entering the traditional overbought zone. This suggests that upward momentum remains strong, but the probability of short-term consolidation or a pullback is increasing. The first resistance level to watch is 1.3665; a decisive break and sustained hold above this level could open up further upside potential. Initial support is at the Bollinger Band middle line around 1.3485, followed by the 100-day moving average around 1.3432, with deeper support around 1.3300. As long as the price remains above 1.3432, the medium-term bullish structure remains dominant. From a 4-hour chart perspective, the GBP/USD pair maintains a fluctuating upward pattern, but is approaching the key resistance level of 1.3665 in the short term. If the price can effectively break through and hold above 1.3665, the upward trend may extend further, and the market will focus on higher psychological levels. Conversely, if multiple tests of 1.3665 fail, and the RSI falls from its high, short-term profit-taking may push the exchange rate towards 1.3550 or even 1.3485. If the price can hold above 1.3485 during the pullback, it is more likely a normal technical correction within a strong upward trend; if it falls below 1.3432, the short-term trend will clearly weaken. Editor's Summary: The British pound is currently supported by a weaker dollar and easing expectations of a Fed rate hike, maintaining its strength against the US dollar. However, expectations of further tightening by the Bank of England are cooling, meaning that the pound's own policy support is not particularly strong. The most crucial short-term catalyst is the UK's July retail sales data. If the data is stronger than expected, the pound is expected to break through 1.3665 and continue its upward trend; if the data is significantly weak, the risk of a pullback from the highs will increase. Technically, 1.3665 is a key breakout level, while 1.3485 and 1.3432 form an important defensive zone. Overall, the pound remains bullish in the medium term, but in the short term, it has entered a sensitive phase after being overbought at high levels.