AUD/USD advances beyond 0.7200 ahead of key US data

• AUD/USD is building on Tuesday's gains, closes in on multi-year highs.
• USD struggles to find demand amid risk-positive market atmosphere.
• ADP Employment Change and Services PMI data will be featured in the US economic docket.

The AUD/USD pair closed in the positive territory on Tuesday and preserved its bullish momentum on Wednesday. As of writing, the pair was trading at 0.7220, gaining 0.82% on a daily basis.

AUD capitalizes on risk-on flows, upbeat data

Earlier in the day, the data from Australia showed that the Commonwealth Bank's Composite PMI came in at 57.8 in July's final reading and showed expansion at a strong pace in the private sector's economic activity. Additionally, Investment Lending for Homes surged by 8.1% in June after declining by 15.6% in May and provided an additional boost to the AUD.

Meanwhile, the risk-on market mood on Wednesday is making it difficult for the greenback to find demand. Ahead of the ADP's monthly Employment Change and the ISM's Non-Manufacturing PMI data from the US, the US Dollar Index is down 0.38% on a daily basis at 92.90.

However, the 10-year US Treasury bond yield, which lost more than 8% on Tuesday, is staging a decisive rebound and was last seen gaining 4.6% on the day. If the T-bond yields continue to push higher after the US data, the greenback could remain resilient against its peers and keep AUD/USD's pair's upside limited.

There won't be any macroeconomic data releases featured in the Australian economic docket on Thursday and the USD's market valuation is likely to remain as the primary driver of AUD/USD's movements.

Technical levels to watch for

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