The US dollar index has stabilized near its highest level since April 2025, which is the core background for the continued weakness of the pound against the dollar. Higher-than-expected US October CPI inflation data and a shift in the stance of several Federal Reserve officials have led the market to price in a 50bp rate hike in December. The 10-year US Treasury yield has once again risen above 5%, widening the interest rate differential between the UK and the US and diverting the attractiveness of pound assets. San Francisco Fed President Daly's remarks further solidified tightening expectations. Her FXS speech tracking score reached 8.3, significantly higher than the historical average of 6.5. She pointed out that the expansion of the AI industry poses a risk of future inflation, and although artificial intelligence is not currently the main driver of inflation, this should not lead to a relaxation of policy vigilance; the service sector has relatively sticky inflation, and she supports continued tightening of monetary policy. The FXS Fed Sentiment Index rose 1.01 points to 147.55, remaining in hawkish territory, reinforcing market pricing in a stronger dollar. Geopolitical factors also favored the dollar. Trump stated that the US would no longer seek a deal with Iran, and attacks on Saudi energy facilities and oil tankers in the Strait of Hormuz continued to support the safe-haven dollar, indirectly suppressing the pound. The only support for the pound comes from expectations of a Bank of England policy increase. The market is betting on a second consecutive 25bp rate hike by the Bank of England at its December 17th meeting. This expectation limits the rate of decline, but currently, there is a lack of active buying, resulting in weak support. Bears are currently waiting for the exchange rate to break below the key level of 1.3200 to open up further downside potential. Without strong catalysts, the GBP/USD pair will likely follow the dollar's movements and is likely to close lower for the second consecutive week. On the four-hour chart, the GBP/USD pair maintains a short-term bearish structure, with the price having broken below the previous support level of 1.3280 and currently trading below the 200-period simple moving average at 1.3315, which has now become significant resistance. Only a sustained hold above 1.3315 can alleviate the current bearish pressure; otherwise, the downside risk remains. The first resistance level is 1.3280, the second is 1.3315, and the stronger resistance is 1.3380; the first support level is 1.3200, followed by 1.3140, with deeper support at 1.3080. Editor's Summary: The main contradiction in the GBP/USD exchange rate is the strengthening of the dollar driven by hawkish expectations from the Federal Reserve. Expectations of a Bank of England rate hike can only provide a slight buffer and are unlikely to reverse the bearish trend. In the short term, the focus is on US PPI inflation data. If PPI again exceeds expectations, the dollar will continue to strengthen, and the exchange rate may break below 1.3200. If inflation data cools down, the dollar will experience a phase of correction, giving the pound a chance to rebound and test the resistance levels of 1.3280 and 1.3315.