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IMF Chief's Woes = Buying Opportunity, Pro Says

Wednesday, 18 May 2011 | 11:37 AM ET
International Monetary Fund chief Dominique Strauss-Kahn appears in federal court May 16, 2011 in New York City.
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International Monetary Fund chief Dominique Strauss-Kahn appears in federal court May 16, 2011 in New York City.

Are Dominique Strauss-Kahn's troubles creating a buying opportunity? This pro says yes.

Andrew Busch, global currency and public policy strategist for BMO Capital, believes the reaction to the arrest of Strauss-Kahn, managing director of the International Monetary Fund, is "way overblown." Talk that Strauss-Kahn's incarceration will push Greece to default, which is weighing on the euro, is off base, he says.

Greece "is not going to be a hard default by any stretch of the imagination," Busch told CNBC's Melissa Lee. "They can't afford it and the rest of Europe can't either."

Money in Motion: Currency Trading
A currency play on the Euro & Japanese yen with Andy Busch, BMO Capital Markets.

Busch thinks all the buzz is creating a buying opportunity for the euro. And in the meantime, over in Japan, Busch believes the upcoming Bank of Japan meeting, and a GDP report that is likely to be soft, will probably dent the yen. So Busch recommends buying the euro and selling the yen at 114 with a stop/loss at 112.75 and a target of 119.50.

Technical patterns also support the trade, Busch says, noting that the euro and yen have been trading in a channel. His entry point is towards the bottom of the channel, and his target is close to the top.

You can watch the whole discussion in the video clip.

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

"Money in Motion Currency Trading" repeats on Saturdays at 7pm.

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