AUD/USD trades at fresh three-week highs above 0.7400, eyes on US PMI data

• AUD/USD is edging higher for the third straight day.
• US Dollar Index struggles to hold above 92.00 ahead of ISM Services PMI data.
• US ADP Employment Change missed the market expectation by a wide margin in July.

After closing in the positive territory on the back of the Reserve Bank of Australia's hawkish policy outlook on Tuesday, the AUD/USD pair preserved its bullish momentum and touched its highest level in three weeks at 0.7425. As of writing, the pair was up 0.3% on a daily basis at 0.7417.

DXY drops below 92.00 after ADP data

The renewed USD weakness in the early American session seems to be allowing AUD/USD to preserve its bullish momentum. 

The data published by Automatic Data Processing (ADP) Research Institute revealed on Wednesday that employment in the US' private sector increased by 330,000 in July. This reading fell short of the market expectation of 695,000 and caused the greenback to come under modest selling pressure. Currently, the US Dollar Index (DXY) is down 0.15% at 91.93.

On the other hand, the data from Australia showed that Retail Sales in June contracted by 1.8% as expected. 

Later in the session, the IHS Markit's and the ISM's July Services PMI reports will be watched closely by market participants. 

Meanwhile, US stocks futures turned negative on the day after the ADP data, suggesting that the DXY's downside could remain limited in the second half of the day if the market mood sours following Wall Street's opening bell.

Technical levels to watch for