Kicking the Can Three Years Down the Road

The euro rallied on Thursday afternoon, after Reuters reported that euro zone officials came to a preliminary agreement over a new aide package that would fund Greece for three more years.

Greece remains under tremendous financial stress as it struggles to get its fiscal house in order.

In recent weeks, the euro has faced alternating streaks of bullish and bearish activity as various news reports of comments from European government officials have supported or put pressure on the currency.

On May 18th, protests in Spain over the austerity measures implemented by the Spanish government coincided with a sell-off in the currency.

Then, on the 26th, news broke that China was willing to purchase a large amount of Portugal's "bailout bonds" in an effort to diversify its massive foreign reserve holdings. The euro appreciated slightly on the news, but then began to resume its decline, as Jean-Claude Junker questioned whether or not the IMF would legally be able to lend financial support to Greece.

The following day, on the 27th, French President Nicolas Sarkozy stated that France would support the euro and oppose any debt restructuring.

Sarkozy also hinted at a potential private bailout of Greece, speculation that was reaffirmed by Thursday's report of the three year deal.

After the news of the agreement broke, market chatter indicated that the deal may not have been as solid as reported. The euro then fell off its highs, though it remained up on the session.

Traders who believe that a deal is likely might consider a long euro play. WisdomTree Dreyfus Euro ETF (NYSE: EU) attempts to return a value corresponding to the general strength of the euro and may rally if the euro enjoys a bull-run.

However, traders who believe that the euro will struggle despite political maneuvering might consider a short euro play with ProShares UltraShort Euro (NYSE: EUO). That belief would be in line with the sentiments Dennis Gartman expressed to Benzinga Radio earlier today.