Champions League semi-finalists only three years ago, PSV entered the UEFA Cup this season after finishing third in their Champions League group behind Inter and Fenerbache. They beat Helsingborg 4-1 on aggregate in the previous round, winning both legs.
The first leg is at the Lane tonight (March 6, 8.05pm) with the return in Eindhoven next Wednesday, March 12.
"It's an important test," said Juande. "PSV play at a decent level in Europe and it's a barometer to see of we can compete at that level.
"PSV are a good side, they are top in their country, they have a great history and team spirit. They are a solid side and you can see that togetherness in them. We know enough about them to know not to underestimate them."
Asked at his media briefing if he thought we were good enough to go all the way, Juande added: "We'll see after this game. It's a very important game and only then will I know if my players have the ability to play on this stage.
"First and foremost we have a difficult home game and we can't think about anything that might come after that. We have to try and get through this first."
COMING SOON - We have an exclusive pre-PSV interview with Juande on Spurs TV Online -CLICK HERE...
Juande Ramos sees our UEFA Cup Round of 16 tie against PSV as the perfect gauge of our chances in the competition.