I have played with the dpi settings and changed the font size but still get a blurry image. I have tried with the Mac as Retina display and scaled. Also the vm the same. My monitor is a dell 4K display monitor. If the Mac runs only with no vm the image is fine. Does parallels 12 support retina better? Or is there a easy solution. Thanks
Try the setting, under Graphics, Best for external displays. My case is running a MacBookPro (with Retina display) and Parallels 12. With Best for external displays you can play with the display settings in Windows to get reasonable fonts and images. This is a bug in Parallels 12 - support told me (via a ticket) that the development team is working on it.