Dollar Bullish Momentum Strengthens After Breaking Key Resistance

The dollar took a new high – the highest level since the beginning of March 2023, developing an upward trend following breakout of the main bearish corridor:Among the major currencies, the AUD led decline against the dollar, followed by the NZD, the intraday fall in the respective currency pairs exceeded 1%. At the same time, optimism in the commodity markets, in particular the rise in oil prices, provided minimal support to commodity currencies in resisting the onslaught of the dollar.The spot price of Brent rose to $90 per barrel, the highest level since mid-November last year. The reason for the strengthening was the news that OPEC + members will extend the voluntary production cut, in particular, Saudi Arabia will add 1 million barrels less than the quota until the end of 2023. Russia will extend its voluntary production cut by 300K until the end of this year as well.The RBA left rates unchanged at 4.1% in today's meeting and disappointed the hawks with a lack of hawkish hints, sending AUDUSD into a massive sell-off. The decline may continue to the area of 0.62, where the expected support is located within the bearish channel (its lower border):S&P Global service sector activity indices for the Eurozone came in worse than expected, the weakening of activity accelerated in August compared to July. PMI in the service sector of France fell from 47.1 to 46 points (forecast 46.7), and Germany from 52.3. to 47.3 points (forecast 47.3 points). The Eurozone Services PMI fell from 50.9 in July to 47.9 points in August, while the forecast was 48.3 points.The downbeat report delivered a blow to European currency, which is not surprising given the sensitivity of the Euro to the leading indicators of the activity of the main economy in terms of the consequences for consumer inflation. There is a growing possibility that the ECB will follow the Fed's example and build communications to prepare markets for a possible pause or stop in the tightening cycle altogether.The European currency will have a hard time now, the support of the main ascending channel has been successfully overcome and the bearish momentum can easily increase now. Short-term bearish targets for the pair are 1.0650 and 1.05, which corresponds to the low of the end of May and the annual low: