(MENAFN- Daily Forex)

• The Australian dollar has rallied just a touch in the early hours here on Monday as we continue to see the market price and the idea of interest rates cuts coming out of the Federal Reserve.
• The question at this point in time is whether or not that interest rate cut is going to be followed by some type of panic or is it a gradual decline. We'll just have to wait and see.
• But ultimately, I think you've got a situation where the Australian dollar is trying to break out to the upside. And you should pay attention to a couple of the more obvious levels.

The first one being the 0.6550 level as it had been like a magnet for price. The 50 day EMA now is sitting right around there as well. So, I think that is worth paying attention to.

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But to the upside, I'd watch the 0.67 level. Mainly because it was a swing high previously. If we can break above that, it opens up the possibility of a much bigger move. I anticipate that between now and the Federal Reserve interest rate decision, things will be a little bit wonky, if you will. And we'll just have to wait and see how people read what the Federal Reserve has to say and whether or not there is some type of significant concern. Because if there is, then you could see the US dollar ironically pick up a bit of momentum as traders will be looking for safety.

EURUSD Chart by TradingView

On the other hand, if it looks like they are not concerned, then traders may start to look towards growth, which helps the Australian dollar. Momentum is most certainly in favor of the Aussie dollar at the moment. So, I do think you have to look at this as a buy on the dip market until proven otherwise.

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