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How Low Can the Euro Go From Here?

Thursday, 31 May 2012 | 3:27 PM ET
Betty Davis in 'All About Eve'
Hulton Archive | Getty Images
Betty Davis in 'All About Eve'

The euro has had quite a slide, and this strategist says even at current levels, he'd sell.

Bette Davis famously warned of a bumpy night, but she had nothing on the euro these days.

The bad news just keeps coming, and Willie Williams, director of institutional derivative sales at Societe Generale, says he would still sell even at these levels.

"There is a risk that we'll see a short-covering rally," he told CNBC's Scott Wapner. But in a potent indication of risk aversion, yields on German bunds are now at zero, he says, and "I think now the euro is the best way to play the short European trade."

Money In Motion: Playing the Euro
Willie Williams of Societe Generale breaks down today's currency trade. "I think the euro is the best way to play the short European trade," Williams says. CNBC's Seema Mody also reports Lions Gate Entertainment is recovering from yesterday's loss.

The key, Williams says, is keeping a tight stop on your trade so you don't get whipsawed.

"I think there is a risk," he says, noting that Spanish bond yields dipped sharply last November on a rating agency action. But this time around, Williams adds, "I think it's going to take a lot more pushing" to reverse the downward pressure on the euro.

He wants to sell the euro against the dollar at 1.2350, setting a stop at 1.2550 and a target at 1.1800.

You can watch the discussion on the video.

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 Terms Dictionary. Top currency strategies are broken down for you in Currency Class.

Talk back: Tell us what you want to hear about - email us at moneyinmotion@cnbc.com.

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