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Strategist: The Euro-Yen Trade Will Return

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Just when you were getting used to a rising euro and sinking yen, along comes an Italian election to upset the apple cart.

At least, that's how it seemed over the past week, as the euro sank below 1.30 after the uncertain political results combined with dismal economic reports and risk-averse investors headed for long-time safe havens.

Brian Kelly of Shelter Harbor Capital says the shift won't last.

Alluding to the euro, he told CNBC's Melissa Lee that "I don't think it goes much lower. I tend to be a little bit more bullish on the euro, particularly particularly after how it reacted after the Italian election." He also thinks the European Central Bank will hold off on an interest rate cut at its upcoming meeting. "Euro above 1.30? I like it."

Over the long term, Kelly says, "the worse that Italy gets, the stronger the euro gets because Italy isn't going to keep the euro."

That is hardly a mainstream view, and Andrew Busch, publisher of AndrewBusch.com, doesn't share it. But even so, he is also eyeing the euro, pointing out that it is trading close to its 200-day moving average.

(Read more: CNBC Explains: Moving Average)

Kelly is also doubtful that the yen's reversal will last.

"I think the yen goes much, much lower. We've got a little bit of risk-off," with the euro's sharp move lower against the yen -

Kelly wants to buy the euro against the yen right around current levels, at 121.15. He recommends a stop at 118.50 and a target of 130.00.

"I might be touch early on this," he warns, so his stop is relatively tight. But "I still love the short yen trade."

You can watch the conversation on the video, starting at 7:17.

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

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