• The Dollar rallies against the Yen and reaches daily highs past 155.50.ç
• The Yen remains the worst performer among major currencies in a calm trading session.
• USD/JPY is gaining traction after breaching the top of a descending channel.

The US Dollar extends gains for the second consecutive day against the Yen on Monday, and tests December’s highs, at the 155.50 area, as the safe-haven Japanese Yen loses ground against its main peers in an otherwise calm trading session.

Monetary policy expectations remain the primary market mover with the Federal Reserve (Fed) and the Bank of Japan (BoJ) decisions looming. The Fed is widely expected to cut rates on Wednesday and likely to signal a more hawkish stance amid the hot US inflation levels. The BoJ, on the contrary, has been laying the ground for a rate hike, although the path forward is uncertain.

Technical Analysis: The US Dollar breaks above the bearish channel

The technical picture shows the US Dollar gaining bullish momentum after bouncing from three-week lows last Friday. Price action has pierced the top of the downtrend channel from the November 20 high, and is looking for a bullish confirmation above 155.50 (December 4 and 5 highs).

Technical indicators in he 4-hour support the bullish view. The Relative Strength Index (RSI) has popped up above 50, pointing to a mildly bullish bias, while the Moving Average Convergence Divergence (MACD) turns positive and continues to advance, suggesting strengthening bullish momentum

A sustained close above the mentioned 155.50 would open the path toward 156.15 December 2 high, ahead of the November 18 high, at 156.60. On the downside, a reversal below the broken trendline, now at 155.50, would bring the intra-day low, near 155.27, into play. Further down, the targets are Friday's low near 154.35 and the channel's bottom, at the 154.00 area.

(The technical analysis of this story was written with the help of an AI tool.)