EUR/AUD 4H Chart: Channel Up

The Euro seems to be recovering earlier than it had been initially anticipated. The pair fell short of 200-period SMA and support trend-line by 40 and 80 pips, respectively. Technical indicators suggest that a down-leg has come to an end, meaning a new rally is now considered to be the base scenario. In addition, market sentiment is bullish in 61% of all cases, even though it might create some downside risks in the long run. The bulls are looking at monthly R2 and weekly R1 near 1.5850/70, followed by the upper edge of the pattern at 1.6278. Despite any positive expectations, a drop below 1.53 cannot be ruled out as well. In case it happens, the focus will turn to monthly pivot point at 1.4870.