The 290 is roughly equivalent to an RX 480/RX 580/GTX 1060. It would still be considered a solid mid-range card capable of 1080P gaming. CPU upgrade is a good call.
RE the CPU though, seeing as it seems like you're not averse to AMD hardware, you're not considering the Ryzen CPUs? While the 7700K with an overclock is definitely the best gaming CPU there is, by the time you get a decent cooler and Z270 board it's actually comes in around $150 more expensive than the Ryzen 5 1600 + mobo, which can get to 3.8-3.9Ghz on a much cheaper B350 board with the bundled cooler. Just for reference, that's approaching (but not quite reaching) the ~$200 difference between a GTX 1080 and the much more capable 1080ti.
Or perhaps the $150 change allows you to upgrade the GPU sooner... or get a better monitor?
If your priority is maximising FPS for 1080P gaming then the 7700K is probably worth the extra money. But if your gaming at higher res (or staying on a sub 90hz monitor), or do any sort of streaming or threaded content creation, the Ryzen 5 is roughly equivalent for gaming, and offers more for content creation for less money.
You get what you want... just raising the question/thought for you to consider.