The pound continued its weakness against the dollar in Asian trading on Tuesday, falling back to around 1.3490. The dollar's strength ahead of the Federal Reserve policy meeting is the main reason for the continued pressure on the pound against the dollar. However, a flurry of UK economic data releases this week, along with the Bank of England's interest rate decision on Thursday, will be important variables affecting the pound's movement. The market is currently awaiting further clarity on monetary policy signals from both the UK and the US. In the US, the core consumer price index rose 0.3% month-on-month in August, higher than market expectations, indicating that underlying inflationary pressures in the US remain somewhat persistent. The recent sharp rise in energy prices has increased the risk of renewed inflation, causing the market to increase its bets on the Federal Reserve tightening policy. According to CME FedWatch data, the market currently expects a 25 basis point rate hike at the Fed's September meeting with a probability of approximately 92.4%, significantly higher than the approximately 67% level before the release of US inflation data. Rapid changes in interest rate expectations have directly increased the relative attractiveness of the US dollar, putting significant pressure on the pound against the dollar around the 1.35 level. US Treasury yields have also become a significant support for the dollar. With rising inflation risks and concerns about double-dip inflation due to rising energy prices, US long-term Treasury yields remain at multi-year highs. High yields not only increase the attractiveness of dollar assets but also indicate that the market's judgment on the Fed's future policy path is becoming more cautious. The Fed will announce its latest interest rate decision this Wednesday, followed by a press conference. The market's current focus is not only on whether there will be a rate hike but also on the policy statement and officials' statements on the future interest rate path. If the Federal Reserve releases a more hawkish policy signal, the dollar may continue to receive short-term support, while the pound/dollar exchange rate may further test the 1.34 level. Conversely, if the policy rhetoric is dovish, the dollar's previous gains may be reversed, giving the pound room to rebound. In the UK, this week also sees a busy period of data releases. UK employment data will be released on Tuesday, inflation data on Wednesday, the Bank of England's interest rate decision on Thursday, and retail sales data on Friday. This continuous release of economic indicators suggests that the pound may experience significant volatility in the coming trading days. The Bank of England is currently expected to maintain its interest rate, but rapidly rising energy prices are reshaping market expectations for UK inflation. If oil prices remain high and are transmitted to the UK domestic price system through energy, transportation, and production costs, the Bank of England's future room for interest rate cuts may be further limited. The market currently sees a 30% probability of a 25 basis point rate hike by the Bank of England on Thursday, significantly higher than the less than 10% at the beginning of last week, and the market has already largely priced in a November rate hike. This means that if UK employment and inflation data continue to show resilient price pressures, the pound may receive new support from interest rate expectations. Meanwhile, changes in the UK-US interest rate differential are also an important indicator for the pound's medium-term trend. The recent improvement in the yield spread between UK and US Treasury bonds has provided some support for the pound. However, in the short term, US interest rate expectations are changing more rapidly, especially with the dollar still holding the upper hand ahead of the Fed meeting. Therefore, whether the pound/dollar can hold the support around 1.3450 will depend on whether UK data can offset the dollar's interest rate advantage. From a daily chart perspective, the pound/dollar is currently maintaining a slightly weak and volatile pattern, with the exchange rate below the 20-day Bollinger Band middle line at 1.3557, and approaching the support area formed by the 20-day Bollinger Band lower line and the 100-day moving average. The 14-day RSI is slightly below 50, indicating that the market's bullish and bearish forces have not yet formed an extreme bias, and the current phase is closer to a directional choice after the adjustment. The first resistance level to watch is the 20-day Bollinger Band middle line around 1.3557. If the exchange rate regains this level, the short-term rebound target will be the upper Bollinger Band around 1.3660. A further break above 1.3660 would mean that the recent adjustment pressure has significantly eased, and the pound has a chance to retest higher resistance areas. Key support levels to watch are the 20-day lower Bollinger Band around 1.3455 and the 100-day moving average around 1.3445. The 1.3445-1.3455 range forms a significant support zone. A break below this range on the daily chart would shift the technical outlook for GBP/USD back to bearish, potentially leading to further testing of the 1.34 level or even lower. On the 4-hour chart, the pair remains in a weak consolidation phase after a pullback. The 1.3500 level is a psychological barrier, while 1.3450 is a key level for bulls to defend. A break above the 1.3550-1.3560 area could form a short-term rebound towards 1.3660; conversely, a breach of 1.3450 would confirm a 4-hour downtrend, with the bears targeting the 1.3400 area. Editor's Summary: The British pound is currently at a crossroads in policy expectations between the Federal Reserve and the Bank of England. Strong US core inflation and rising expectations of interest rate hikes continue to support the dollar, but UK employment and inflation data, as well as the Bank of England's stance on energy inflation, could potentially push up interest rate expectations for the pound again. In the short term, key support levels to watch are around 1.3450 and resistance levels at 1.3557. A break above either of these key areas could further confirm the next direction.