AUD/USD moves sideways above 0.68 ahead of week's key macro events

• US Dollar Index loses traction after last week's rally.
• FOMC is expected to lower the policy rate by 25 basis points.

The AUD/USD pair closed the previous week with modest losses and started the new week in a quiet manner as investors are staying on the sidelines ahead of this week's key macroeconomic events. As of writing, the paie was trading at 0.6830, adding 0.1% on a daily basis.

A busy week ahead

Last Friday, United States Trade Representative (USTR) Lighthizer said that the US and China were close to finalizing some sections of the trade agreement to help the AUD end the week on a positive note. In the absence of fresh developments regarding the US-China trade conflict and significant data releases, the pair is having a tough time find direction.

During the Asian trading hours on Tuesday, Reserve Bank of Australia (RBA) Governor Phillip Lowe will be delivering a speech. More importantly, the third-quarter inflation report from Australia on Wednesday will be watched closely by the market participants.

On the other hand, the first estimate of the third-quarter gross domestic product (GDP) growth in the United States and the Federal Open Market Committee (FOMC) monetary policy announcements will be the primary drivers for the Greenback.

Previewing this event, "A 25bp rate cut is currently priced in with more than 90% probability. Given that we expect the easing bias to be maintained, but without a pre-commitment to further reductions, the impact on the US treasury market should be limited,” Danske Bank analysts said. Meanwhile, the US Dollar Index is moving sideways in the 97.70/80 area on Monday to reflect the subdued trading action.

Technical levels to watch for