US Dollar in 3-month tops around 94.30

• DXY boosted by dovish ECB message.
• US 10-year yields testing daily tops around 2.45%.
• Trump’s tax reform in centre stage as House of Representatives is voting.
• Next Fed Chief run down to Powell and Taylor.

Measured by the US Dollar Index, the greenback continues to push higher in the second half of the week and is currently tying with fresh 3-month tops in the 94.30 region.

US Dollar firmer post-ECB, looks to US politics, Fed

The index picked up extra pace after the ECB delivered a ‘dovish taper’, matching most of the previous forecasts. In fact, the European Central Bank will now reduce its bond purchases to €30 billion/month from January to September 2018, disappointing those who were expecting a more hawkish message and forcing EUR/USD to drop to fresh lows in the boundaries of 1.1700 the figure.

In the meantime, yields of the key US 10-year reference are flirting with daily highs near 2.45% after falling to sub-2.41% levels earlier in the session, all adding extra legs to the buck’s recovery.

Furthermore, USD should stay under pressure as the US House of Representatives is now voting on the budget blueprint that is crucial for the tax reform proposed by President Trump.

Earlier In the US data space, initial claims came in better than expected at 233K WoW while pending home sales came in flat on a monthly basis in September.

US Dollar relevant levels

As of writing the index is up 0.71% at 94.32 facing the next up barrier at 95.90 (38.2% Fibo of the 2017 drop) seconded by 96.51 (high Jul.5) and finally 97.87 (high Jun.20). On the other hand, a breakdown of 93.51 (10-day sma) would aim for 93.46 (21-day sma) and then 93.06 (low Oct.19).