FXStreet (Delhi) – Research Team at BBH, suggest that like the March-May bounce, we view this current EM bounce as a correction in an extremely oversold market as given the magnitude of EM FX weakness this year, most currencies have barely undergone any sort of significant correction. Key Quotes “Recall that EM currencies ended 2014 on a very weak note, with the sell-off continuing into March before soft Q1 US data pushed back the timing of Fed lift-off. Most EM currencies then gained some limited traction in the March-May period, but the EM asset class sold off again in April/May when the US economy got back on track. EM then weakened sharply and many went on to establish multi-year and/or all-time lows ahead of this bounce.” “As such, we look for further short-term EM gains that should give way to an eventual resumption of the long-term bearish EM move. The point of this piece is to identify some potential retracement objectives for the main EM currencies.” “Over the medium-term, we still retain a defensive posture with regards to EM and would recommend investors remain selective. We expect further volatility and weakness ahead for most of EM FX, and so dedicated EM investors should look for relative value opportunities. Divergences within EM will continue to be seen. In general, we continue to favor Asia, with EMEA next and Latin America last.” For more information, read our latest forex news.