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How to Play the Euro's Slide

Sabine Scheckel | The Image Bank | Getty Images

Economic reports from China and Europe have been disappointing, but for this strategist, they suggest a bullish trade.

That flash PMI report from China was some letdown: apparently Chinese manufacturers still can't get in gear, so to speak. The news from Europe wasn't any better, and markets are responding to the gloomy statistics.

For one strategist, though, the bearish data point to a bullish trade.

Andrew Busch, global currency and public policy strategist at BMO Capital Markets , says the sagging markets, and the risk-off mood among currency traders, has "given us an opportunity for those of us who want to go long euros."

Busch is hoping the euro continues to soften so that he can initiate trade close to the currency's 200-day moving average. The currency's pullback is just part of a predictable pattern, he told CNBC's Scott Wapner.

"Once you basically have had a near death experience with the euro, you had this massive relief rally when you don't die, and then it'll back off a little bit," Busch says.

So Busch wants to wait for further softening and then go long the euro right around 1.2850, setting a stop at 1.2725 and a target of 1.3125.

You can watch the discussion on the video clip, starting at 4:07.

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