AUD/USD stays below 0.6800 despite renewed US Dollar weakness

• AUD/USD declined below 0.6800 during the European trading hours on Monday.
• US Dollar struggles to find demand heading into American session.
• Business sentiment data from Australia will be looked upon for fresh impetus.

AUD/USD lost its traction after having recovered toward 0.6800 earlier in the day. Despite the renewed US Dollar weakness, the pair was last seen losing 0.4% on a daily basis at around 0.6770.

In the absence of high-impact data releases, markets started the new week on a cautious note, allowing the US Dollar to find demand. Although the US Dollar Index started to edge lower amid improving market mood during the European trading hours, AUD/USD failed to stage a decisive rebound.

Investors remain cautious as they try to figure out how the rising number of coronavirus cases on re-opening steps taken by China will impact economic activity. Earlier in the day, Chinese officials announced that they will take the Covid-tracking app offline and the city of Shanghai announced that all areas of the city will be deemed as "not at risk of Covid' from December 13. 

There won't be any macroeconomic data releases from the US on Monday. In the early trading hours of the Asian session on Tuesday, the National Bank Australia (NBA) will release the Business Confidence and Business Conditions indexes for November.

Ahead of Tuesday's Consumer Price Index data from the US and the Federal Reserve's monetary policy announcements on Tuesday, however, AUD/USD could have a hard time making a decisive move in either direction.

Technical levels to watch for