Despite the recent surge in the price of Brent oil and a slight slide in the gold price, there might be a comeback to the dominant trend. In previous months, Gold was rising steadily while oil has been plunging. These commodities went their separate ways in the wake of the COVID-19 effect on the markets.
In both cases, the gold charts have developed excellent bullish signals, and the oil is drawing a dominantly bearish pattern. But, looking at the oil markets, you realize that its price has doubled since the end of April.
In the past two weeks, the upswing came to a halt, and the price is forming a definite head and shoulders pattern. Notably, the price is creating the right shoulder of the pattern. The primary up trendline was already slightly broken, but the neckline appears to be still intact. In that case, the oil price breaking the neckline can provide a great selling opportunity.
On the other side, looking at Gold, you notice that the price is currently breaking the upper line of the flag formation. This flag was a correction in the bullish trend, which, in turn, promotes another wave upward. The ideal legitimate buy signal is expected to be triggered when the gold price breaks the horizontal resistance at 1735 USD/oz.
The USDJPY pair also comes into play since the yen is considered to be a haven currency. On May 29, the price of this pair managed to escape from the recent dominant sideways trend. Sellers successfully smashed two up trendlines and the lower line of the rectangle indicator pattern.
The pair even tested the last support as resistance, and it was favourable for the sellers. Hence, it may indicate that further downtrend is coming up.