AUD/USD fades initial spike on RBA Governor Lowe comments, trades below 0.6800

• RBA’s Lowe says QE is not their agenda at this point.  
• US Dollar Index extends sideways grind near 98.30.
• Coming up: Trade Balance and New Home Sales data from US.

After advancing to a fresh daily high of 0.6795 with the initial reaction to  Reserve Bank of Australia (RBA) Governor Phillip Lowe’s remarks on the monetary policy outlook, the AUD/USD pair reversed its direction and was last seen trading at 0.6775, where it was virtually unchanged on a daily basis.

RBA’s Lowe dismisses need for QE

While speaking at the Annual Australian Business Economists Dinner, in Sydney on Tuesday,  Reserve Bank of Australia (RBA) Governor Phillip Lowe said that quantitative easing (QE) was not on their agenda. “There may  come a point when QE would help, but I don’t expect us to get there,” Lowe added to provide a short-lasting boost to the AUD.

However, Lowe further noted that all options were still on the table if they were to observe a rapid increase in the unemployment rate and a drop in inflation to keep the pair’s gains capped.

On the other hand, the greenback stays resilient against its rivals with the US Dollar Index moving sideways near the 98.30 mark for the second straight day and doesn’t allow the pair to gather bullish momentum.

In the second half of the day, New Home Sales, Goods Trade Balance and the Conference Board’s Consumer Confidence Index data from the US will be looked upon for fresh impetus. Additionally, investors will be keeping an eye on fresh developments surrounding the US-China trade dispute.  

According to Chinese news outlets, Xinhua and Global Times, negotiators have reached  an agreement  on a phase-one deal that includes tariff rollbacks, albeit sides still having differences on the duties.

Technical levels to watch for