AUD/USD swimming in circles beneath 0.77

• The Aussie looks ahead to the new week still stuck in the same old slump.
• Geopolitical tensions look set to continue driving market sentiment as trade issues remain unresolved.

The AUD/USD kicks off the new week near 0.7675 after a tense weekend that finished off with more tariff tempers following the US' announcement that it might consider a further $100B in trade duties against China.

Political tension continues to be the name of the game as the US and China face-off on trade, but the mood may soften for the new week following Sunday's tweets from US President Trump stating that he and China's Xi "will always be friends". Markets have been marred by massive swings in volatility as the ongoing trade spat between the two superpowers ebbs and flows, and the Aussie has been feeling the drag, both bolstered by a weakening US Dollar but capped by receding risk appetite in the broader markets.

Further reading: US President Trump pretty busy on Sunday morning

The Aussie sees a slow start to the week on the economic calendar, kicking things off with the mid-tier AiG Performance of Construction Index for March at 23:30 GMT. The performance index last printed at 56, and the reading today is unlikely to move things much unless the figure moves too much in either direction.

Following that eyes will be on a speech from the Reserve Bank of Australia's (RBA) Governor Phillip Lowe, who will be speaking early Wednesday at 03:45 GMT. With the RBA looking locked in on rates for the foreseeable future, Lowe's comments will be watched carefully as traders look for hints about the central bank's expectations going forward.

AUD/USD Levels to consider

The AUD has been drooping consistently for 2018, and bullish potential is looking limited as noted by BBH in their take on the Aussie, while FXStreet's Chief Analyst Valeria Bednarik noted that, "technically, the pair attempted a couple of times to surpass the 0.7700 figure these last few days, but quickly retreated, indicating that selling interest is still strong. In the daily chart, technical readings favor a downward extension, as the pair was unable to surpass a sharply bearish 20 DMA, currently at around 0.7695, while the Momentum indicator maintains its bearish slope within negative territory, as the RSI consolidates around 43. Shorter term, and according to the 4 hours chart, the pair presents a neutral-to-bearish stance, as it's currently developing below a horizontal 20 SMA, while technical indicators hover below their mid-lines, without enough directional strength to suggest further declines ahead."

Support levels: 0.7610 0.7575 0.7540

Resistance levels: 0.7695 0.7740 0.7785