AUD/USD still stuck near 0.7050 as buyers remain in the lurch

• The Aussie sees a half-hearted bullish correction to kick off the new week.
• Tuesday sees limited data for the AUD as the US holiday comes to an end.

The AUD/USD is trading near 0.7075 after Monday’s US holiday-thinned volumes saw the Greenback take a breather, allowing the Aussie to take a mild step back up after ticking down into a low of 0.7040 to open up the new trading week.

The Aussie is down into fresh lows for 2018 after last week saw the AUD slip nearly 3% against the US Dollar as the USD catches a steady stream of bids thanks to continued expectations of inflation and US Fed rate hikes, as well as a firm bolstering effect from a climb in US Treasury yields.

Tuesday  opens the gates with a reading of the National Australia Bank’s Business Conditions and Confidence indicators at 00:30 GMT; NAB’s Business Conditions reading for September is expected to come in notably softer at 9 (previous 15), while NAB’s Business Confidence reading is expected to print mildly higher, forecast to tick up to 5 (previous 4). Later on, Westpac’s Consumer Confidence input for October will be coming in near the end of the day at 23:30 GMT, which last came in at a bearish -3%.  

It’s a relatively thin week for the Aussie on the economic calendar, and traders will be keeping an eye out for this Thursday’s US CPI reading, and core inflation within the US economy is expected to tick upwards from 2.2% to 2.3%, but the early week still sees plenty of time for Greenback bidders to step back into the fray after the US continent wraps up their Columbus Day long weekend.

AUD/USD levels to watch

The Aussie remains trapped near 0.7050 as the short side struggles to force the pair into and through the 0.70 major handle, but further downside would be the safer bet, according to FXStreet’s own Valeria Bednarik: “the pair has spent most of the last two sessions hovering around the 0.7060 level, and despite closing the day higher, it is at risk of extending its decline, given that in the 4 hours chart it’s now struggling with a bearish 20 SMA, while technical indicators have recovered within negative territory, both having lost their upward strength, the Momentum indicator just below the 100 level and the RSI at 39. Below the mentioned daily low, the pair could near the 0.7000 key psychological threshold while a break below it should signal a steeper decline ahead, despite the oversold conditions the pair has in bigger time frames. Selling interest stands at 0.7100, the level to overcome to see the downward pressure easing.”

Support levels: 0.7040 0.7010 0.6980

Resistance levels: 0.7100 0.7140 0.7175