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EM Currencies May Be Setting Up For Next Leg Down

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The left chart shows the daily chart of FXCM's EMBASKET, which is an equally weighted index of the CNH, MXN, ZAR and TRY. The index is below its black 20-day SMA and the SMA is pointing down. Moreover, the daily RSI is below 50 (blue rectangle), which is indicative of a bearish momentum. The hourly EMAs have crossed bearishly and the hourly RSI has pushed below 50 (green ellipses). These are bearish developments, at a time when the daily chart is reacting off of SMA resistance.

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