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Can This Euro Rally Be Saved?

Adam Gault | OJO Images | Getty Images

The euro has had a nice move up on reports of actual progress by European leaders on the debt crisis. But this strategist has other ideas.

Someday, somehow, European leaders may finally solve the debt crisis. The moves in that direction today have been enough to lift the euro - but Todd Gordon, co-head of research and trading at Aspen Trading Group, thinks there are better currency opportunities out there.

Gordon told CNBC's David Faber that the euro has risen less than several risk-on currencies, notably the Australian dollar. Markets "certainly had a good upside reaction today in the euro" he says, but while the euro is up roughly 1%, "this liquidity has been funneled into commodity and commodity-associated currencies like Australia. Australia is up about 3%."

For Gordon, a technical analyst, that relative outperformance of the Aussie suggests there is more to come, so he wants to sell the euro against the Australian dollar. He would enter the trade around 1.3200 with a stop above recent highs, at 1.3500, and a target of 1.2500.

Selling the yen against the Australian dollar also makes sense to Gordon right now. "All of a sudden we have volume coming back," he says, with advances leading declines by ten to one, "so Australia is on, and yen is off."

Your pick.

You can watch the whole discussion on the videotape.

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

Learn more: The essential vocabulary for currency trading is on Key Currency Terms. Top currency strategies are broken down for you in Currency Class.

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