AUD/USD trades with modest losses below 0.6900

• AUD/USD is trading in a narrow band below 0.6900.
• US Dollar Index turns flat on the day near 97.40.
• Personal Spending in US is expected to increase by 9% in May.

The AUD/USD pair closed the day little changed on Thursday and extended its sideways grind into a second straight day on Friday. As of writing, the pair was down 0.15% on the day at 0.6875.

Attention shifts to US data

In the absence of significant macroeconomic data releases and fundamental drivers, the pair is having a difficult time making a decisive move in either direction. Although the greenback stays resilient against its peers following the two-day rally, the upbeat market mood helps the AUD limit its losses.

In the early American session, the US Bureau of Economic Analysis (BEA) will release the Personal Consumption Expenditures (PCE) Price Index data. More importantly, Personal Spending and Personal Income figures will be watched closely by market participants.

Ahead of these data, the US Dollar Index is flat on the day at 97.44. If Personal Spending reading shows a strong-than-expected recovery in May, the greenback could start losing interest as a safe-haven and risk-off flows could lift AUD/USD back above 0.6900.

Assessing AUD/USD's near-term outlook, "the RBA’s stance on the aussie is noteworthy as the central bank has omitted any mention of it in recent statements," said Patrick Bennett from CIBC Capital Markets. "To us, that suggests comfort with present levels, confirmed by Governor Lowe who has said ‘I would like a lower currency at some point...but at the moment, I think it is really hard to argue the Australian dollar is overvalued'."

Technical levels to watch for