The Australian Dollar shed off some of the recent gains during the Monday morning trading session as increased uncertainty over the banking sector continued to take centre stage this past weekend. The announcements of joint action by several central banks, including the Federal Reserve, European Central Bank and Bank of Japan and a government-backed UBS takeover of Credit Suisse during the weekend helped strengthen optimism towards the stability of the banking sector and capped the US dollar rally at the same time.

The currency pair could be very volatile in the day’s trading session as investors have their sights firmly set on the US with the Federal Reserve’s interest rate decision due this week.

Technical

The 4H chart shows that the currency pair is currently trading sideways as the bulls and bears continue to fight for supremacy ahead of the US Fed’s interest rates decision this week. A short-term trading opportunity could exist at the trading range within the resistance level of 0.67155 and a support level of 0.66553 as investors look to consolidate heading into the interest rates decision.

Summary

With the bulls and bears looking to position themselves to take full advantage of the Fed’s interest rate decision this week, a trading opportunity could exist if there is a breakout in either the 0.67155 resistance level or the 0.6653 support level. The 0.67414 and 0.65954 levels are probable if a breakout beyond resistance or support occurs, respectively.

Sources: TradingView, Reuters.