EUR/USD had a good day yesterday. Kit Juckes, Chief Global FX Strategist at Société Générale, anlayzes what is needed to see a sustained move above the 1.10 level.

EUR/USD has been driven more by short-term position adjustments than anything fundamental

A sustained break above 1.10 may require some help from softer US data (higher claims in the US could tip the balance, here) or better data in Europe (we’ve had a moderately upbeat INSEE survey today). 

In the longer run, we expect the Eurozone economy to bounce back from recent softness, and that should help drive the Euro higher. But for now, EUR/USD has been driven more by short-term position adjustments than anything fundamental.