USD/JPY Price Analysis: Weekly triangle advocates volatility expansion, 128.50 is the key

• USD/JPY holds lower ground as bears keep the reins for the third consecutive day.
• One-week-old symmetrical triangle restricts immediate moves.
• Downbeat RSI, bearish MACD signals favor sellers to refresh multi-month low.
• Buyers need validation from six-week-old descending trend line to retake control.

USD/JPY licks its wounds around 129.40 as it seesaws near an intraday low during early Thursday. In doing so, the Yen pair consolidates the latest losses as a two-day losing streak.

Even so, the quote prints mild losses while staying inside a one-week-old symmetrical triangle, between 128.50 and 131.00 by the press time.

That said, the bearish MACD signals join the downward-sloping RSI (14) line to keep USD/JPY sellers hopeful. Also challenging the Yen pair buyers could be a descending resistance line from mid-December 2022, close to 131.80.

It should be noted that the 50% Fibonacci retracement level of the pair’s December 15 to January 16 downtrend, near 132.70, precedes the one-month-long horizontal resistance area around 134.50-75 to challenge the pair’s further upside.

On the flip side, a clear break of the stated triangle’s support, close to 128.50, becomes necessary for the USD/JPY seller’s conviction.

Following that, the monthly low surrounding 127.20, also the lowest level in eight months, could probe the Yen pair bears before directing them to the 61.8% Fibonacci Expansion (FE) of the quote’s moves between December 20 and January 18, around 125.20.

Overall, USD/JPY is funneling down towards a breakout point and hints at volatility expansion moving forward.

USD/JPY: Four-hour chart

Trend: Further downside expected