The US dollar is on the move as the US economy remains strong and the Fed pushes on with rate hikes and quantitative tightening. A logical casualty of this is emerging market currencies. The chart shows our equal-weighted index of 25 emerging market currencies (against the US dollar), and 200-day moving average breadth across those 25 countries. The key point is that the Topdown Charts EMFX index has made a sharp turn to the downside, and market breadth has completely broken down. You could make a case that market breadth is oversold at this point, especially given valuations have pulled back to neutral from previously overvalued. But personally I don’t like the risk-reward for EMFX at this juncture given the prevailing global macro cross-currents.