EUR/USD consolidates gains below 1.18, up more than 100 pips on the week

• EUR/USD trades in a 50-pip range on Friday.
• Greenback weakness fuels the pair's modest daily rise.
• The pair is on track to close the third straight week with gains.

The EUR/USD pair fluctuated in a relatively narrow range on Friday and started move sideways a little below the 1.18 handle as investors are getting ready to wrap up the week. At the moment, the pair is at 1.1795, up 0.2% on the day.

US T-bond yields weigh on the buck

A negative market sentiment in the second half of the day ramped up the demand for the risk-free US Treasury-bonds, pushing their yields lower and impacting the greenback negatively. The US Dollar Index, which recorded a short-winded recovery earlier in the session on the back of robust macroeconomic data from the U.S., is looking to end the week below the 94 mark for the first time since mid-October. At the moment, the DXY is down 0.26% at 93.60 while the 10-year T-bond yield is losing 0.4%.

On the other hand, the shared currency seems to have received some support from the comments by Deutsche Bundesbank president and the ECB Governing Council member Jens Weidmann. Speaking at the Frankfurt European Banking Congress, Weidmann argued that a less distinct loosening of monetary policy would be justified and added the economic recovery had progressed further than inflation figures currently suggested.

The economic docket in the euro area won't be offering any significant data that could impact the price action on Monday. However, ECB President Mario Draghi will be testifying before the European Parliament and his tone could be the driving factor for the pair.

• EUR: Policy developments set to drive volatility - ANZ

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet, writes, "in the daily chart, technical indicators recovered the momentum upward, while the pair remained above the 38.2% retracement of its latest bullish run, with the only down note being the fact that the price remains right below its 100 SMA."

Bednarik further adds, "the weekly high at 1.1860 is the immediate resistance ahead of the 1.1920 level, while beyond this last a test of 1.2000 seems likely. The mentioned Fibonacci support comes at 1.1745, with a break below it favoring a downward extension towards the 1.1660 region, a strong static support and the 61.8% retracement of the same rally. A break below this last with signal a change of course, with 1.1460 being back on the table."