US Dollar Index extend gains, eyes 94.00

US Dollar gains momentum amid rising US yields.
Renewed optimism over US tax reform plan

The greenback gained momentum during the American session amid a rally in equity prices in Wall Street and rising US bond yields. The moves were triggered by optimism about the Republican tax reform plan.

The US Dollar Index rose from 93.50 to 93.88. It climbed above the level it had before Wednesday’s FOMC statement. The index has been able to erase all losses that followed Fed’s rate hike.

Price action on Friday has been mostly related to the US tax reform plan. Some GOP senators rose concerns about the bill yesterday, hitting equity prices. Today renewed optimism pushed Wall Street higher. The Dow Jones was rising 0.65% while the 10-year yield rose from 2.35% to 2.37% boosting the US dollar.

Levels to watch

The DXY was rising for the second day in a row, recovering momentum after falling to 1-week lows yesterday. Price rose back above key MA in 4 hours charts.

To the upside, the next resistance is seen around 94.00 followed by the 94.10/20 area where a downtrend from March highs stands. A break higher could open the doors to more gains. On the downside, support levels might lie at 93.45, 93.25 (weekly low) and 93.00.

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