The Australian dollar is the best performing G10 currency today, with AUDUSD trading 2% higher. However, USD weakness also plays a big role in the move on the pair. The Australian dollar is on the rise today thanks to a Bloomberg report. According to the media piece, improving China-Australia relations may lead to partial lifting of a 2-year long ban on imports of Australian coal to China. The Chinese National Development and Reform Commission discussed yesterday the possibility of allowing 4 major companies to resume purchases of Australian coal this year, starting from April 1, 2023. Coal is one of top export products for Australia and China was the largest consumer before an unofficial ban was put in place in 2020 due to diplomatic disputes.
Taking a look at AUDUSD chart at D1 interval, we can see that the pair dipped yesterday as USD strengthened. However, tables have turned today with AUD being on the rise and USD underperforming. The pair bounced off the support zone ranging between 23.6% retracement and 50-session moving average (green line) and launched a strong recovery move. AUDUSD broke back above 200-session moving average (purple line) and is now closing in on the resistance zone, marked with 38.2% retracement, that limited previous upward impulse.
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Source: xStation5
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