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Why everyone got the euro trade wrong

The euro, which was one of the biggest consensus shorts in the first quarter, has skyrocketed—soaring nearly 9 percent from its low hit just three weeks ago. And one technician, who recently called for a steep correction in the currency, said the charts are now setting up for an even bigger rally.

"The chart of the euro shows significant upside," technical analyst Rich Ross said Thursday on CNBC's "Trading Nation."

Just two months ago, Ross called for a 30 percent correction in the euro, predicting it could plunge from $1.06 to 80 cents. But since then, the market has seen a swift reversal. "We see this higher low that we established in the middle of [last] month. And we've seen a big surge since that low from about $1.05 to the current $1.13."

Read MoreEuro slips from 10-week peak as German yields retreat

By Ross' chart work, the euro has crossed significant short term technical levels that should lead to more moves higher. Specifically, Ross likes the fact that the euro recently broke out from the neckline of a double bottom that has formed on the chart.

"The explosive move [past that neckline] has taken out the 100-day moving average, and I think this sets the stage for an extension of the advance all the way to the 200-day moving average at $1.20," said Ross, head of technical analysis for Evercore ISI. That's another 6 percent move from current levels.

However, Ross warned, the move will not happen in a straight line up, as there is resistance around $1.15 and $1.17. Still, he added, "I think the euro has what it takes to reverse one of these big consensus trades."

Furthermore, Ross said that with German bund yields, bond yields and commodity currencies all surging, "we want to be a buyer of the euro. That all supports this trade."

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