Forexlive Americas FX news wrap 14 May: The USD rebounds from earlier declines. Gold lower

• At the close: Tech leads as US stocks climb again
• David Einhorn: There is no effort to reduce the deficit, buy gold
• Crude oil futures settle at $63.15
• Goldman Sachs: April US retail sales likely to show frontloading boost
• Putin not interested in one-on-one meeting with Zelensky in Istanbul – report
• The market has removed 60 basis points of Fed easing in the year ahead
• Gold Technical Analysis – Price breaks below 200-bar MA on 4H as momentum shifts lower
• European equity markets sag late, Spain stocks hit 16-year high
• Super Micro Computer (SMCI) – Bullish break above 200 day MA. Key resistance targets ahead
• EIA weekly US crude oil inventories +3454K vs -1078K expected
• US trade deals with Japan and South Korea said to be close – report
• Fed’s Jefferson: Current policy is a good place to respond to economic developments
• Gold cracks the May low and sinks further
• ForexLive European FX news wrap: Dollar struggles continue amid mixed markets
• Germany’s Chancellor Merz: We’re committed to avoiding protracted trade conflict with US
• US MBA mortgage applications w.e. 9 May +1.1% vs +11.0% prior
• Trump: I’m a big crypto fan
• Fed’s Goolsbee: It will take time for current inflation trends to show up in the data

There was little in the way of news today with only the weekly crude oil inventory data (not a real market mover) as the only release in the US. Canada building permits fell -4.1%, erasing most of the 4.5% gain from last month.

Other than that, there were the aftermath of the deals made yesterday in the Middle East from Pres. Trump (and staff) with the tech/chip sector reaping most of the rewards.

• AMD closed up 4.68% and is up 19.37% since May 6.
• NVIDIA rose 4.16%. Shares are up 34% since April 22
• Super Micro Computers (SMCI) surged nearly 15.69% after announcing a multi-year, $20 billion partnership with DataVolt, a Saudi Arabian data center developer. Shares are up 40.64% since May 9th but is still down some 73% from the 2024 high closing level.

There was some Fed commentary today with

• Federal Reserve Governor Philip Jefferson stating that the current “moderately restrictive” policy rate is well-positioned to respond to evolving economic conditions. He emphasized that the Fed is closely monitoring hard data for signs of slowing activity, though recent inflation figures suggest continued progress toward the 2% target. However, he warned that the path forward remains uncertain, particularly due to the potential inflationary impact of new tariffs. While the labor market remains solid, Jefferson noted that Q1 GDP figures likely overstated the slowdown in economic activity. He added that whether tariffs cause lasting inflation will depend on their implementation and how supply chains adjust.

Earlier Fed’s Goolsbee also spoke to the idea of patience saying:

• He is emphasizing that some of the April inflation data likely reflects the lagged nature of how price trends appear in official statistics. He noted that the Fed remains in a wait-and-see mode, choosing to hold off on any policy shifts until clearer information emerges. Goolsbee cautioned against drawing conclusions about long-term inflation trends amid the current short-term volatility, stressing the importance of filtering out noise in the data. He reiterated that the Fed’s role is to act as a steady hand, not reacting to daily movements in markets or political headlines. His comments reinforce the Fed’s patient stance as it continues to assess evolving economic conditions.

Meanwhile, hedge fund manager David Einhorn, speaking to CNBC from the Sohn Conference, voiced serious concerns about the lack of any meaningful effort to address the U.S. fiscal deficit. He noted that “there isn’t even the beginning of a plan” to confront the issue unless it escalates into a full-blown crisis. He also dismissed recent claims of finding $2 trillion in savings, suggesting the actual figure is closer to $150 billion, with tariffs potentially contributing an additional $100 billion.

Einhorn expressed skepticism about the focus on the trade deficit, saying he doesn’t view it as a major problem. On gold, he stated he would be pleased to see it rise to $3,500 or $3,800, but not to $30,000, which he implied would reflect severe economic distress. He criticized the current administration for “building a retreat” and argued that the U.S. is not being perceived as a reliable negotiating partner by other nations.

Looking ahead, Einhorn believes that the current market fixation on tariffs will likely fade, and other economic themes will take center stage. He also revealed a tactical position: he’s short leveraged MicroStrategy ETFs while holding a long position in MSTR stock. He explained that these leveraged ETFs are costly to operate, as they cannot use swaps and must instead rely on purchasing expensive options.

In the forex, the USD is ending mostly higher vs the major currencies with the exception vs the JPY (the USD was lower vs the JPY)

• EUR +0.15%
• JPY -0.45%
• GBP +0.38%
• CHF, +0.39%
• CAD +0.30%
• AUD +0.63%
• NZD +0.69%

The USD did try to move lower into European morning session but reversed higher in the US session today.

EURUSD: The pair tested its 200-hour moving average at 1.1261 during the European morning session but failed to hold above it, rotating lower and breaking below the 100-hour moving average at 1.1183. As the session comes to a close, EURUSD is trading near 1.1169. Holding below the 100-hour MA in the new trading day would keep the bearish bias intact and sellers firmly in control.

GBPUSD: GBPUSD climbed to test the lower boundary of a key swing area between 1.3362 and 1.33784, but sellers leaned against the level and pushed the price back down toward the 200-hour moving average at 1.32852. While there was modest buying at that level, the support ultimately gave way. The pair is now testing the 100-hour moving average at 1.32556 into the day’s close. A sustained break below that level would further shift momentum in favor of the sellers.

USDJPY: The USDJPY was down over 1% earlier in the day but rebounded in the US session and is closing here in the rising 100 hour moving average at 146.777. That MA will be a short term barometer into the new trading day.

NZDUSD: THe NZDUSD traded above its 100 bar moving average on the four hour chart at 0.59449, but could not sustain momentum. The subsequent fall to the price below the 200 hour moving average at 0.59368 and then the 100 hour moving average of 0.59049. The key 200 day moving average at 0.58828 is the next key target going into the new trading day.

Looking at the closing levels in the US equities:

• Dow industrial average fell -89.37 points or -0.21% at 42051.06.
• S&P index closed higher on the year for the second consecutive day. Today the price rose modest 6.03 points or 0.10% at 5892.58. The index is up 0.19% for the year.
• NASDAQ index rose 136.72 points or 0.72% at 19146.81. For the year, the index is down -0.85%.

In the US debt market, yields are ending the day higher:

• 2 year yield 4.057%, +4.0 basis points.
• 5-year yield 4.170%, +4.9 basis points
• 10 year yield 4.542%, +4.3 basis points
• 30 year yield 4.975%, +3.3 basis points

in other markets:

• Crude oil is trading down $0.76 at $62.91
• Gold is trading down $68 or -2.10% at $3181.30. Gold is down 7.8% from its most recent swing high on May 6 as flight to safety flows ease with hopes for more tariff deals
• Bitcoin is trading down $646 at $103,494.

This article was written by Greg Michalowski at www.forexlive.com.