US Dollar approaches 95.00 ahead of US GDP

• DXY trading in fresh 3-month tops near 95.00.
• US House passed budget, tax reform now closer.
• Flash US Q3 GDP figures on sight later in the NA session.

The US Dollar Index (DXY), which tracks the buck vs. a basket of its main rival currencies, is prolonging the upside today to the vicinity of the critical 95.00 handle.

US Dollar boosted by dovish ECB, now looks to GDP

The index is advancing for the second session in a row so far on Friday, extending at the same time the upbeat momentum following yesterday’s ‘bullish engulfing’ candle. Attention has now shifted to the recent breakout of the ‘neckline’ of the inverse H&S pattern prevailing since late July just above the 94.00 handle.

The greenback gathered unexpected buying interest after the ECB cut its stimulus programme although it extended its duration at least to September 2018, greatly disappointing expectations of a ‘hawkish tapering’.

In addition, the bullish stance on the buck intensified further after the US House of Representatives passed the budget blueprint on Thursday, moving a step closer to the final implementation of the Trump’s tax reform proposal.

Later in the NA session, advanced US GDP figures for the July-September period are due along with the final gauge of US consumer confidence for the current month.

US Dollar relevant levels

As of writing the index is gaining 0.27% at 94.90 and a breakout of 95.90 (38.2% Fibo of the 2017 drop) would target 96.51 (high Jul.5) en route to 96.87 (200-day sma). On the downside, the immediate support aligns at 94.27 (high Oct.6) followed by 94.03 (23.6% Fibo of the 2017 drop) and finally 93.81 (10-day sma).