The euro has been on a tear against the dollar, but this strategist sees a better way to play the common currency.
It's been one thing after another for the euro - and I don't mean to make that sound like a bad thing.
Ever since the European Central Bank announced its bond buying plan, a drumbeat of good news has followed, and when the Federal Reserve committed to QE3, the common currency went soaring.
That's why it has been a great time to be long the euro against the dollar, but if you're thinking of chasing the trade, wait. "I kind of think this dollar selloff theme is coming to an end," says Todd Gordon, co-head of research and trading at Aspen Trading Group.
Instead, Gordon told CNBC's Melissa Lee, "I think the yen is going to become the funding currency."
The euro has pulled back slightly on news that Spain is holding off on asking for a bailout. But Gordon thinks the Spaniards will reduce course in the end and ask for aid, and that will help the euro.
At the same time, "we're in a rising interest rate environment," he says. "The 10-year yield is on quite a tear, and that will put an offer into the yen market" because it makes U.S. assets look relatively more valuable. Also, he says, "Bank of Japan officials are there ready to intervene" if they think the yen is too strong - and they have a meeting this week.
So Gordon wants to buy the euro against the yen on a pullback, entering at 102.50. He recommends a stop at 101.50 and a target of 105.50.
You can watch the discussion on the video clip, starting at 3:11.
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