AUD/USD continues to push higher toward 0.7600

• AUD/USD is edging higher for the third straight day.
• US Dollar Index remains on the back foot ahead of PMI data.
• Private sector business activity continues to expand at a robust pace in Australia.

After fluctuating in a narrow band around 0.7550 during the Asian session, the AUD/USD pair gained traction and reached a daily high of 0.7585. As of writing, the pair was up 0.3% on the day at 0.7575.

The data from Australia showed on Wednesday that the Commonwealth Bank Composite PMI edged lower to 56.1 in June's preliminary reading from 58 in May. Nevertheless, this reading showed that the private sector's business activity continued to expand, albeit at a softer pace than it did in May.

On the other hand, the US Dollar Index (DXY), which retraced a portion of last week's rally on Monday and Tuesday, struggles to reverse its direction ahead of the IHS Markit's Manufacturing and Services PMI reports. At the moment, the DXY is posting small daily losses at 91.64, allowing AUD/USD to remain afloat in the positive territory.

Meanwhile, Wall Street's main indexes look to open modestly higher on Wednesday, suggesting that the greenback is unlikely to attract investors with the market mood staying upbeat in the second half of the day.

AUD/USD near-term outlook

Assessing AUD/USD's technical outlook, "AUD/USD may see a short-term correction back towards the ‘neckline’ to the major top at 0.7588/7617, however, the recent weekly close below the key band of support including the 200-day average at 0.7556 reversed us into a medium-term bearish view," said Credit Suisse analysts.

“We look for a turn back lower in due course, with the next initial support seen at 0.7477/61, below which would complete a fresh intraday bearish continuation pattern to open up the 23.6% retracement of the entire upmove from 2020 at 0.7418 next," analysts added. 

AUD/USD to turn back lower with next key support at 0.7418 – Credit Suisse.

Additional levels to watch for