The pound retreated against the dollar during Tuesday's Asian morning trading session, falling back to around 1.3410. This week will see a series of key catalysts, including the US midterm elections, the Bank of England's interest rate decision, and a series of US employment data releases, leading to a generally cautious wait-and-see approach from market participants. The US midterm elections may reshape market narratives regarding inflation and fiscal deficits. Markets predict a high probability of Democrats winning the House of Representatives, but the Senate outcome remains uncertain. Market surveys indicate that if Democrats control both houses, the market expects stricter regulations in the AI industry, potentially suppressing risk assets. If Democrats only win the House, and Republicans control the Senate, the US fiscal outlook will be mixed. If Republicans achieve a landslide victory in both houses, the market anticipates a new round of tax reform and increased defense spending, further amplifying the US fiscal deficit and thus impacting US Treasury yields and the dollar. Most economists expect the Bank of England to raise its benchmark interest rate from 3.75% to 4.00% at its November meeting on Thursday. This would be the first rate hike since August 2023, when UK inflation will be well above the central bank's 2% target. The market will focus on the post-meeting press conference for clues about the UK interest rate path; hawkish comments from Bank of England Governor Bailey will provide direct support for the pound. Brown Brothers Harriman analysts point out that stronger UK inflation and economic activity support this rate hike, and the Monetary Policy Committee vote may result in a 7-2 split, with the two dovish members likely to support maintaining the current rate. However, the firm also warns of potential signals from the monetary policy report. The market has already priced in a cumulative 100 basis point rate hike over the next 12 months. If the report highlights spare capacity in the economy, the market will lower its rate hike expectations, limiting the pound's upside potential. Even if the rate hike is implemented, the pound faces the risk of a "buy the rumor, sell the fact" correction. Fed voting member Logan released a very hawkish policy signal, achieving a score of 8 on her speech tracking chart, higher than the historical average. She emphasized that the Fed needs at least two more 25 basis point rate hikes, and skipping a single policy meeting will not change the policy endpoint. She stated that the US economy is growing steadily, consumption is strong, and the labor market is tight; the Fed needs to maintain a moderately restrictive policy level until inflation clearly falls back to 2%. Influenced by these remarks, the Fed sentiment index rose, entering a clearly hawkish range, providing support for the dollar and indirectly suppressing the pound's rebound against the dollar. Trade concerns are not currently the dominant factor; policy expectations from the US and UK central banks and the US election are jointly driving market movements. On the daily chart, GBP/USD maintains a short-term bullish bias, with the price firmly trading above the 20-period Bollinger Band middle line and the 100-day simple moving average, currently in the upper half of the Bollinger Bands. The 14-period RSI is around 58, indicating good momentum, but it hasn't yet entered overbought territory. As long as the price holds above the moving average support, the bulls remain in control. The first resistance level is the upper Bollinger Band at 1.3465; a pullback is likely at this level if buying pressure weakens. Initial support is at the 100-day moving average at 1.3385, followed by the middle Bollinger Band at 1.3318. In the event of a deeper pullback, the lower Bollinger Band at 1.3175 will be a crucial support level, likely attracting buying interest. On the 4-hour chart, the price has experienced a slight pullback in the short term, but the overall moving averages remain in a bullish alignment. The RSI indicator has retreated slightly from its high level, without showing signs of severe overbought conditions. The short-term bullish pattern remains intact, but upward momentum has weakened. A decisive break above 1.3465 would open up further upside potential for the bulls; conversely, a break below the key support level of 1.3385 would shift the short-term trend towards weakness, with the price potentially testing the 1.3318 level. The market awaits the Bank of England's policy decision and the US election results to determine its direction. Editor's Summary: The GBP/USD pair is currently in a pullback phase after some of the positive expectations have been priced in. The market has already fully priced in the Bank of England's 25 basis point rate hike. The true determinant of the pound's future trajectory will be the Bank of England's statements regarding future rate hike paths. Hawkish comments from Federal Reserve officials are supporting the dollar and putting downward pressure on the pound. Short-term risks are twofold: first, a dovish signal from the Bank of England could lead to a "buy the rumor, sell the fact" scenario, putting downward pressure on the pound; second, the US midterm election results could push up US Treasury yields, strengthening the dollar and pressuring the exchange rate. Potential opportunities arise from the Bank of England signaling continued tightening coupled with a dovish US election result, potentially pushing the pound back up to test resistance levels. After the Bank of England's decision and the election results are released, consider positioning based on a breakout signal within the 1.3385-1.3465 range, and be wary of short-term volatility caused by major events.