TD Research maintains a bullish bias on the USD and a short exposure in EUR/USD in spot targeting 1.00
"The key implication of these findings: a return to the "right" growth regime would be the best time to lean aggressively against broad USD strength. Global growth is key, especially if the peak inflation theme holds. We're just not there yet. The chart underscores that we're still in the second regime, where both surprises and data are negative," TD notes.
"As a result, we don't think it is time to aggressively fade the USD (just yet), though the conviction to see persistent USD strength has waned. In the G10, we added short EURUSD exposure late last week, expecting the recent range to persist for another month (we also hold short EURCHF exposure). We also note that USDJPY runs a bit cheap to HFFV, pointing towards another retest of the 135 area in the very short term," TD adds.