AUD/USD slipping from 0.73 as Dollar buying returns

The AUD/USD is trading to the downside to wrap up Monday's action, drooping once again into the 0.7250 region as Tuesday's overnight session gets underway.

The Aussie saw some pickup last week after market sentiment made a solid recovery after several weeks of getting bogged down by trade war tensions focusing on the US-China spat that continues to spiral out of control, but investor risk appetite kicked a notch higher after the US' latest round of tariffs on $200 billion USD worth of Chinese goods turned out counter-intuitively better than expected, clocking in at a 10% levy instead of the feared 25%.

Intrinsically, the Aussie is unlikely to deliver much upwards momentum, with the Australian domestic economy barely grinding its way towards the Reserve Bank of Australia's (RBA) inflation targets, and the RBA likewise embedded in a wait-and-see stance, having made no major policy adjustments for over two years and counting.

Aussie-focused data is limited this week on the economic calendar, and the AUD/USD will be driven largely by Greenback action, with the US Fed set to deliver another interest rate hike this week beginning on Wednesday, and USD traders will be buckling down ahead of the major Fed showcase this week.

AUD/USD levels to watch

Technical measures are leaning towards the bullish side, but a stall in the pair's momentum sees a strong risk of sideways to bearish action if the AUD remains underbid, and as FXStreet's own Valeria Bednarik noted: "Technical indicators are currently resting above their midlines, trying to regain some upward slopes but without enough strength at the time being. In the same chart, the price is currently battling with a bullish 20 SMA while above the larger ones, also supporting a bullish continuation, more likely on an upward acceleration through the 0.7290 price zone. Given dollar's ongoing weakness a decline seems unlikely unless risk-aversion takes over equities, something that could drag the Aussie lower."