Following the volatile market sentiment this week with reports of central bank and government intervention for the world's major economies has affected the movement of currencies sensitive to changes in sentiment.
Among them is the Australian dollar which displays different movement directions at the beginning of the week and at the end of the week.
Risky market sentiment earlier in the week and a significant strengthening of the US dollar pushed the Australian dollar to a 2-year low this week before a price rebound was seen.
This can be observed on the chart of the AUD/USD currency pair with the decline last Wednesday reaching around 0.63700, recording the lowest level since trading last May 2020.
However, after the price tracked to that area, the price bounced back following the decline of the US dollar which reduced the pressure on the previous price drop.
Examining the central bank's point of view, the Reserve Bank of Australia (RBA) is expected to further increase interest rates with an increase of 50 basis points in October which is the most aggressive tightening measure since 1990.
Thus, analysts see the potential for prices to continue rising even higher if the US dollar also remains with a dismal performance.
After a price bounce of around 170 pips last Wednesday to around 0.65300, the zone remains a resistance to the flat price below it heading into the end of the week trade.
However, the price is seen to be moving above the support level of the Moving Average 50 (MA50) on the 1-hour time frame charted in AUD/USD, signaling the potential bullish price movement to continue.
If the price manages to pass the resistance of 0.65300, the price will continue to rise higher and test the zone around 0.6600 before heading to the concentration level of 0.67000.
However, if the US dollar strengthens again and pushes the price below the MA50 support level, the signal for bearish price movement will push the expectation to reach the 0.63700 support again.
A drop lower from the zone would continue to record recent 2-year lows.
