The Australian dollar is sharply lower today, giving up last Fridays gains as the US Federal Reserve decided to keep rates on hold.

At 5.55pm (GMT) the Aussie dollar was trading at US71.29c down from US71.89c on Friday.

Following on from last Thursdays rally after the rate decision, the Australian dollar held its ground on Friday until a late selloff, as traders digested the news that although the Fed didn’t move on rates, it was only a matter of time before they did.

US Fed president Janet Yellen noted that the potential slowdown in China weighed on the central banks decision which will keep investors eyes peeled to key data out of China on Wednesday for signs of an improvement.

The Aussie currency was able to break through a key resistance level of US72c last Thursday and Friday before succumbing to selling pressure and heading down towards the recent support level of US71.10c.

If this support level is broken we could see the Australian dollar trade significantly lower, and especially if the numbers out of China on Wednesday come in under expectations.