Forex Flash: EUR/USD set to test 1.33; close above takes it to 1.35 - Societe Generale (Barcelona) - EUR/USD looks set to test 1.33 and according to Kit Juckes, Head of Forex Strategy at Societe Generale, "a weekly close above there, takes it on to 1.35." Supporting the Euro outlook, Kit adds that "the biggest driver of the euro's value is the spread between Spanish and German bonds and that is going one-way - tighter."

Mr. Juckes adds: "The 1.20-1.33 move in Sep/Dec took out all the shorts, and introduced a few random longs. A move up from here would need longs to get put on more widely, but I would not rule that out. Only when US rates start to re-connect with (improved) US economic data will the euro's trend turn down again. That's a H2 story..."