In the Asian trading session this week, GBP/USD maintained a slightly stronger trend, hovering around 1.3650 and continuing to approach the high reached last Friday. Over the past month, the pound has maintained an overall upward trend against the dollar, which has been further strengthened by the recent continued weakness of the dollar. The core trading logic in the market is gradually shifting from "dollar interest rate advantage" to "changes in US policy expectations," giving GBP/USD more significant upward momentum. The US dollar has failed to mount a significant rebound recently, with the dollar index hovering near a three-month low. After some easing of US inflationary pressures, the market has begun to reduce its bets on an immediate rate hike by the Federal Reserve, thus weakening the dollar's interest rate support. Meanwhile, the US Treasury announced that it would at least double the size of its long-term Treasury repurchase operations starting in September, aiming to improve liquidity in the long-term US Treasury market and alleviate pressure from rapidly rising yields. Following this announcement, US long-term Treasury yields fell, further diminishing the dollar's short-term attractiveness. From a foreign exchange pricing mechanism perspective, a decline in US Treasury yields often signifies a weakening of the relative yield advantage of dollar assets. Especially as the market begins to reassess the Fed's future policy path, dollar bulls lack new catalysts, making it easier for funds to flow to previously relatively strong non-US currencies. The British pound has benefited from this change on the dollar side, with GBP/USD gradually approaching the important technical resistance level around 1.3660. However, the current weakness of the dollar is not without potential reversal factors. Tensions between the US and Iran could still impact global risk appetite. If the situation in the Middle East escalates further, energy transportation and oil supply could be affected, and a renewed rise in international oil prices would increase global inflationary pressures. In this scenario, demand for the US dollar as a traditional safe-haven asset may resurface, limiting the upside potential of the pound against the dollar. Energy prices are particularly noteworthy. Crude oil not only influences global inflation expectations but is also a crucial variable for the Federal Reserve in determining future monetary policy. If oil prices continue to rise due to supply concerns, the decline in US inflation may slow, or even experience a temporary rebound. This would force the market to reassess the likelihood of a Fed rate cut or hike this year. For GBP/USD, this means that the current weakness of the US dollar remains highly uncertain, and investors should not simply chase the pound based on the recent weakening trend of the dollar. Regarding the UK, the pound's current performance reflects more pressure from the dollar than a significant improvement in the UK's economic fundamentals. As the exchange rate approaches its recent highs, the market will focus more on UK inflation, wage growth, and the Bank of England's future policy path. If UK inflation remains sticky, limiting the Bank of England's room for rate cuts, the pound will still receive some interest rate support; conversely, if UK economic data weakens significantly, the market will increase its bets on a Bank of England rate cut, and the pound's relative advantage may decline. US economic data this week will be a key variable influencing the direction of GBP/USD. The market is focused on the Personal Consumption Expenditures Price Index (PCE), considered a key indicator of US inflation trends. If the core PCE continues to show easing price pressures, the need for further tightening by the Federal Reserve may decrease, putting continued pressure on the dollar and potentially allowing GBP/USD to break out. Conversely, if the PCE shows renewed inflation resilience while rising energy prices strengthen inflation expectations, the dollar may regain support. Furthermore, Fed Chairman Kevin Warsh's speech at the Jackson Hole symposium is also highly sensitive to market sentiment. The market will be looking for policy signals regarding the future path of interest rates, inflation risks, and labor market conditions. If Warsh adopts a dovish stance, the market may further reduce the dollar interest rate premium, increasing the probability of GBP/USD breaking through recent highs; if he emphasizes inflation risks and releases a more hawkish policy signal, the dollar may rebound. From a daily chart perspective, GBP/USD has maintained an upward trend for nearly a month, consistently trading above major moving averages, with the overall trend remaining bullish. The current area around 1.3660 constitutes an important supply zone and is a key level for whether the bulls can open up further upside potential. If the exchange rate can effectively break through 1.3660 and close stably above that level, the next stage may see further testing of the 1.3700 and 1.3750 areas. On the downside, the first level to watch is the psychological level of 1.3600, followed by support around 1.3570. As long as the price remains above 1.3570, the bullish structure on the daily chart remains largely intact. Looking at the 4-hour chart, GBP/USD is still in a short-term upward channel, with both highs and lows generally trending higher. Short-term moving averages continue to provide support, and the MACD remains in a relatively strong zone. However, as the price approaches 1.3660, short-term momentum is entering a phase requiring confirmation of a breakout. If the exchange rate retraces to 1.3600 and quickly finds buying support, then breaks above 1.3660 again, a new round of upward movement is likely to be confirmed. If multiple tests of 1.3660 fail to break through, profit-taking may occur, leading to a pullback to the 1.3570-1.3600 area to find new support. Therefore, short-term trading logic is more suited to focusing on "breakout confirmation" rather than blindly chasing highs. Editor's Summary : Overall, GBP/USD remains in a relatively strong position. The continued weakening of the US dollar, the decline in US Treasury yields, and reduced market expectations for immediate tightening of policy by the Federal Reserve are the main drivers of the pound's rise against the dollar. Technically, 1.3660 is a key level that the bulls must break through. If it holds above this level, further upside potential may open up. However, the situation in the Middle East, rising oil prices, and US PCE inflation data could still alter the short-term trend of the US dollar. Whether GBP/USD can shift from "high-level consolidation" to "breakout" in the coming trading days depends heavily on US inflation data and the Federal Reserve's policy signals. If the US dollar continues to weaken, the pound is expected to continue its nearly month-long upward trend; if safe-haven demand re-emerges to push up the dollar, the exchange rate may first experience a technical correction.