TD Research discusses the USD outlook and likes to sell USD/JPY on rallies towards 132.
" To fade or follow the latest moves in the USD is one of the major discussion points across market participants...We still think the evidence favors a USD consolidation over the next month. Our charts of the week highlight the stretched nature of the USD on HFFV alongside little "upgrades" to the global economy," TD notes.
"The USD’s trading at a near 2% discount to global macro drivers, highlighting nearterm consolidation targets. Our dashboard shows the most froth in Asia, where 132 provides a nice entry level to fade USDJPY. That said, we see significant mediumterm USD downside, kick-starting in Q2 when the global economy accelerates, rates converge with the US, and equity flows/relative valuations bite," TD adds.