It would be better to sell USD/JPY rather than buy EUR/USD (Societe Generale)

Societe Generale notes that to play the dollar's short-term decline on the forex, it would be better to sell the USD/JPY rather than buy the EUR/USD.

"If the flattening of the US yield curve represents more than just strong short positioning on Treasuries, and tells us something about the change in expectations regarding the US economy, then it's not "good" for the dollar.

The EUR/USD needs to break tthrough 1.1530 to send a significant upside signal, and this requires more positive local news.

If we are heading towards a decline of the dollar, and in the absence of a good reason to buy the euro, we prefer to sell the USD/JPY or the USD/CAD rather than purchase the EUR/USD."