USD/JPY Consolidates Within Ascending Triangle: Key Levels to Watch

WhaleStalker · 2026-01-20T11:14:52+00:00

The USD/JPY pair holds within an ascending triangle, influenced by the Bank of Japan's hawkish stance and safe-haven demand for the US Dollar. Key support and resistance levels will determine the next market movement, with upcoming economic data potentially acting as a catalyst.

WhaleStalker

2026-01-20 11:14:52

Abstract generation in progress

The USD/JPY pair is currently holding within an ascending triangle formation on the daily timeframe, maintaining its position near 156.74 as of Monday’s European session. This technical structure reflects the ongoing tug-of-war between supportive factors for both currencies.

Market Drivers Behind the Current Move

The Bank of Japan’s hawkish stance continues to provide underlying support to the Yen. Governor Kazuo Ueda’s recent comments suggested that wage growth and inflation may accelerate in the near term, raising the probability of further interest rate hikes from the central bank. He specifically noted that “wages and prices are highly likely to rise together moderately” and emphasized that rate increases would “continue if the economy and prices align with forecasts.”

Conversely, the US Dollar has benefited from safe-haven buying, with the Dollar Index (DXY) trading 0.15% higher at 98.60, reflecting increased demand for the Greenback despite the Yen’s own strength. This dynamic keeps USD/JPY range-bound for now.

Technical Analysis: The Ascending Triangle Setup

From a technical standpoint, USD/JPY’s position within the ascending triangle remains intact. The pair maintains support from the 20-day EMA positioned at 156.26, which continues to slope upward—a bullish indicator. The rising trend line originating from 154.39 provides another floor near 156.56.

The Relative Strength Index (RSI) trades at 55.99, comfortably above the 50 midline, signaling steady positive momentum without overbought conditions.

Support and Resistance Levels

On the downside, a daily close below 156.56 would invalidate the ascending triangle pattern and potentially trigger a pullback toward the December low at 154.35. To the upside, a decisive break above November’s high of 157.90 could pave the way for the psychological 160.00 level.

What’s Next?

Monday’s session brings the US ISM Manufacturing PMI for December at 15:00 GMT, which could provide the catalyst for the next directional move. Traders should monitor these key levels closely for breakout confirmation.

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