AUD/USD inching towards new 2018 lows below 0.7050

• Aussie traders struggling to keep the AUD/USD upright.
• With data thin in the early week, market sentiment is the main driver, which bodes poorly for the Aussie.

The AUD/USD drifted lower in early Tuesday action, testing into 0.7060 as risk-off sentiment continues to weaken the Aussie in broader markets.

The Aussie continues to mark in steady declines against the Greenback from last week's challenged highs of 0.7150, and the AUD was unable to develop bullish momentum on its own, and the pair is setting up for a longer-term bearish downturn, with sellers keeping eyes on making new lows for 2018 below 0.7040.

Markit PMIs for the US, due on Wednesday are the next meaningful economic data due for the AUD/USD pair, and USD-based markets will be keeping an eye on overall sentiment in the meantime, as trade-centric headlines continue to cross the wires, driving investors into and out of safe haven assets at regular intervals.

AUD/USD levels to watch

With the Aussie running out of gas from 0.7150, FXStreet's own Valeria Bednarik notes that the AUD/USD is primed for a new 2018 low: "the pair broke below the 23.6% retracement of its October's decline on the back of Wall Street's weakness, entering the Asian session a few pips below the level and with a short-term technical stance according to intraday technical readings. In the 4 hours chart, the pair was unable to advance above its 20 and 100 SMA, both heading lower around the 38.2% retracement of the same decline at around 0.7110, as technical indicators hold near daily lows, the RSI still heading south and the Momentum directionless. The key support from here is 0.7040, the yearly low, with a break below it opening doors for a continued decline toward the 0.6820 price zone."

Support levels: 0.7040 0.7000 0.6960

Resistance levels: 0.7110 0.7145 0.7170