Where the Euro Goes From Here

Yuri Kuzmin | iStock Vectors | Getty Images

The euro is having a big day on the heels of the summit agreement - but this strategist is wary.

When news broke that European leaders had reached an agreement on helping Spain and Italy trim their borrowing costs and creating centralized bank supervision, the euro jumped immediately - and it has largely held onto those gains.

But don't be fooled, says MacNeil Curry, head of foreign-exchange and interest rates technical strategy at Bank of America Merrill Lynch . The bigger trend, he says, "is clearly to the downside," he told CNBC's Scott Wapner. "It's also worth noting what we are not seeing today. You're seeing currencies where the market is very, very short, moved to the topside as investors exit those positions. But in markets where the positioning is much lighter and cleaner, so for example in dollar-yen, it's a much more subdued move if any real move at all."

The same trends are holding true for risk assets generally, he says.

"At this stage in the game, it's best to say that this is a positioning based countertrend move that once it runs its course, we're going to see a resumption of the larger trend for a lower euro and arguably lower risk currencies going forward."

One trade that hasn't been volatile, Curry says, is the euro against the Australian dollar.

The downward move of euro-Aussie hasn't changed direction, Curry notes, and "that stability speaks to the strength of the downtrend." So Curry thinks this is the way to play the euro weakness he anticipates.

Curry wants to sell the euro against the Australian dollar at 1.2500 with a stop at 1.2600 and a target of 1.2100.

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.