Everyone seems to hate the euro and many traders are shorting the currency to profit from weakness if the debt crisis worsens. Exchange traded funds tied to the euro’s fortunes could be an interesting play for brave contrarians given extreme bearish sentiment and the recent rush to U.S. dollars.

Speculators were net short the euro versus the dollar by a record high earlier this month, WSJ.com’s MarketBeat reported.

The iPath EUR/USD Exchange Rate ETN (NYSEArca: ERO) and CurrencyShares Euro Trust (NYSEArca: FXE) are trading near 52-week lows on the Eurozone debt crisis. [Euro ETFs and the Debt Crisis]

The euro is also trying to hold the critical 1.30 level versus the dollar.

With so many traders shorting the euro, the potential exists for a “short squeeze” if the euro strengthens and investors scramble to cover.

“Typically when everybody and their grandmother has piled into a trade, it’s a good time to start thinking about moving in the other direction,” MarketBeat reported. “One problem with this idea, though, is that the euro, despite a massive pile of bets against it, has not fallen nearly as far as it did the last time there was a huge wave of short interest.”