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EURUSD : Upside Seems Limited, Following a Rising Wedge Pattern

(EURUSD : 4 Hour Chart)

EURUSD is following uptrend since the release of series of downbeat US data. Today better than expected annual rate of Inflation in euro zone pushed the pair higher again. According to the data the annual rate of euro zone inflation remain unchanged at .5% in June. The core rate of Inflation ticked up to an annualized .8% from .7% in May. Although the data is showing any growth but at least it is not sliding into deflation.

On the 4 Hour Chart, the pair seems like following a rising wedge pattern which signals that the pair might pause its gains and upside is limited. So the pair is expected to come down breaking the support trend line of the wedge. On the stochastic oscillator the pair is in the overbought zone and thus gain seems limited. However I would also consider waiting for the crossover of the moving averages. 50 day SMA seems like contracting towards the 200 day SMA to cross above it, if it continues to do so and crosses above it, the pair will not decline and will continue to follow a bullish trend. If not the pair will follow a bearish trend and decline according to the rising wedge pattern.