The Japanese Yen has headed into a new calendar quarter on a high note, with its customary haven role underscoring demand which has brought USD/JPY down to its 2019 lows.

The currency has been supported by a range of economic uncertainties, of which two loom the largest. The first is the ongoing trade dispute between the US and China. There has been some cooling of rhetoric on this subject from both sides as May has slipped into June. A durable settlement clearly remains elusive, but any headlines suggesting that such an end is being actively and amicably sought could well see risk appetite revive, probably to the detriment of the Yen.

TECHNICAL ANALYSIS: USDJPY DOWNTREND MAY EXTEND INTO THIRD QUARTER

In the second quarter USDJPY technical forecast, I outlined a couple of brewing bullish and bearish candlestick formations that might have defined the outlook for months to come. At the time, price action hinted that the more likely scenario would be a resumption of the dominant downtrend from 2015. Heading into the third quarter of 2019, that is looking to be the more likely outcome.

USD/JPY MONTHLY CHART