Last week, Reserve Bank of Australia Governor Michele Bullock mentioned that a future interest rate cut could be influenced by factors such as deflation, wage growth, and declining housing costs. This morning, such signs surfaced: the weighted average Consumer Price Index (CPI) for January remained unchanged at 2.50% year-over-year, contrary to expectations of an increase to 2.60% year-over-year. Additionally, rental prices declined from 6.2% year-over-year to 5.8% year-over-year.
As a result, after a 5-pip drop yesterday, the Australian dollar started today's session with further declines. However, since the RBA meeting is not scheduled until April 1, the local sensitivity of the Aussie to economic data may hinder its continued decline toward the target level of 0.6273. Notably, U.S. building permits for January, expected to be released today, are projected at a borderline 0.1%, following a 0.7% decline in December. Meanwhile, new home sales for January are projected to decrease by 3.0%.
Moreover, the Marlin oscillator's signal line is declining ahead of schedule and is approaching the zero line, indicating a possible upward reversal before the price reaches its target support. A reversal above 0.6351 would re-open the path toward the 0.6482 target.
On the four-hour chart, the price is consolidating between yesterday's low of 0.6325 and resistance at 0.6351. A strong hold above 0.6351, followed by consolidation above the MACD line at 0.6363, would confirm the intention to push toward 0.6482.
