Trumps Speech was much better than expected with a more conciliatory tone and lack of detail allowing the stock rally to continue. Bears hoping for a trump disappoint capitulated and fueled a 300 point rally to above 21000 on the Dow. US Stocks are now extremely overbought but we lack a catalyst for a correction at the moment.
The USD was already on a ultra strong footing from the FEDspeak earlier in the day and this continued with USD/JPY extending gains to Y114 and GBP/USD break below 1.2300. EUR/USD was stubborn holding 1.0500 so far.
Chances of a March Rate hike have surged to 80% in the last 24 hours and the USD strength could easily continue for the next 2 weeks as we approach the March 15th meeting
The EUR/USD performance was especially strong given the backdrop of fresh political scandal in the French presidential elections. Candidate Francois Fillon is set to be charged but is refusing to leave the race.
USD/JPY key resistance is the Y115 level which has held the last 2 attempts. The US 2 year yield is now back at December levels however and at this time the USD/JPY was at Y118.
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