Emerging market basket shows signs of accumulation

Jan 18, 2023 | Commodities


The FXCM EMBasket is an equally weighted basket of four emerging market currencies against the USD. The basket comprises:

  • Chinese renminbi.
  • Mexican peso.
  • South African rand.
  • Turkish lira.

November 2020 to September 2021 saw the EMBasket charting a sideways distribution pattern (red rectangle). It then moved into a mark-down phase, with the basket candles below the 30-week exponential moving average (EMA), and the EMA pointing down. The RSI, during this phase, was below 50, denoting downward momentum (orange rectangle).

From July 2022, the basket has drifted sideways in an accumulation pattern (green rectangle). It has now crossed above its 30-week EMA and the EMA has turned up. This is bullish. The RSI has moved above 50 (blue rectangle), connoting an underlying bullish momentum. The longer this maintains, the greater the chance of further appreciation ahead.

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