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US Dollar Price Action Setups: EUR/USD, GBP/USD, USD/JPY

By :   James Stanley , Sr. Strategist
January 6, 2026 7:47 PM

We’re into the 2026 open and the US Dollar is showing an ascending triangle formation, which points to upside potential. For USD-strength, USD/JPY still stands out as an attractive venue and the pair has held and bounced from support at 156.20. Meanwhile, for USD-weakness, GBP/USD has shown a clean sequence of higher-highs and lows. EUR/USD can be justified in either direction as I looked at during the webinar and whatever pans out there will likely show impact in the broader DXY basket.

US Dollar Four-Hour Chart

Chart prepared by James Stanley; data derived from Tradingview

EUR/USD

The ascending triangle in DXY above compares to the similar backdrop in EUR/USD from early 2025 trade last year. In both instances, a strong trend dominated until support began to show and last year in EUR/USD, it was around the 1.0200 Fibonacci level and that led to the build of an ascending triangle. Last year’s EUR/USD rally took-hold in March with a break of the 1.0500 level, leading to a strong next few months as price eventually rallied up to resistance in the 1.1686-1.1748 zone.

But for the past six months that same zone has been where buying pressure has dried up, and at this point, sellers are trying to re-take control of the matter with a sequence of short-term lower-lows and highs.

EUR/USD Daily Chart

Chart prepared by James Stanley; data derived from Tradingview

GBP/USD

For USD-weakness, I still favor GBP/USD. At this point the pair is below the 1.3500 level and that remains a big spot for bullish continuation scenarios as that psychological level has historically been a major inflection point for the pair.

At this stage, there’s higher-low structure at the 1.3414 level so that’s the spot that bulls need to defend to retain control, and if we do see more significant USD-strength, that points to the next market that I’ll look at.

GBP/USD Four-Hour Chart

Chart prepared by James Stanley; data derived from Tradingview

USD/JPY

For USD-strength, USD/JPY is still the major market that I’m following. The pair has put in another bounce from higher-low support and as shown in the webinar, chasing this market to any degree remains challenging and possibly problematic. But – the higher-lows have held, and that keeps open the possibility of continuation on the long side of the market. And, for those that would like to avoid the USD altogether, there’s possibility for pushing Yen-weakness themes against the Euro or British Pound.

USD/JPY Four-Hour Chart

Chart prepared by James Stanley; data derived from Tradingview

--- written by James Stanley, Senior Market Analyst, Global Macro

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