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How to Trade the Euro After the Greek Debt Deal

The Greek national flag is seen flying above the parliament building on Syntagma Square in Athens, Greece, on Thursday, Feb. 16, 2012.
Bloomberg
The Greek national flag is seen flying above the parliament building on Syntagma Square in Athens, Greece, on Thursday, Feb. 16, 2012.

With Greece out of the woods for now, this strategist is eyeing a bullish currency trade.

Now that the other shoe has dropped and Greece has embarked on its massive debt restructuring, currency strategists are looking around for their next trade.

Rebecca Patterson, chief markets strategist for J.P. Morgan Asset Management, Institutional, thinks it involves the euro.

"I do worry a lot about Greece. A lot of the risk is priced in - that's probably the best thing we can say about Greece," she told CNBC's Melissa Lee. "I worry about Portugal, and possible contagion there. I worry about France with their election later this spring and what that might mean."

But for the next couple of weeks, Patterson says, "Greece is largely resolved. We do have a lot of support from both the European Central Bank and from better data globally," like the U.S. nonfarm payroll report. So, she says, "I want to ride that wave for the short term."

In particular, Patterson wants to buy the euro against the Japanese yen. "The euro itself I'm not that in love with, but it's going to be helped by better risk appetite," she says. The yen, meanwhile, is weakening.

So Patterson wants to enter the trade at 108.20 with a target of 114.00 and a stop at 105.50.

Todd Gordon, co-head of research and trading at Aspen Trading Group, agrees with the direction of the trade, but questions whether technical indicators support a rise all the way to Patterson's target. But Andrew Busch, global currency and public policy strategist for BMO Capital, likes her strategy. "I think if you're going to trade maybe upside euro, don't do it against the U.S. dollar. I think the yen is the best way to do it because of the massive quantitative easing," he says.

You can watch the discussion on this video.

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