EUR/USD heads for the highest close in months, eyes 1.1200

• EUR/USD has the best week since October, but remains below December intraday highs. 
• US dollar among the biggest losers in a shortened week. 

The EUR/USD continued to rise during Friday’s American session and printed a fresh two-week high at 1.1187. As of writing trades at 1.1180/82, consolidating significant daily gains. From the level it had a week ago, the pair is up a hundred pips, on its way to the highest weekly close since August. 

The key driver in EUR/USD has been a weaker US dollar. The rally across financial markets during the Christmas week, weight on the greenback. The DXY lost 0.60% on Friday and posted the worst weekly results since mid-October. It was about to end the week under 97.00. 

Test of 1.1200 seems likely 

The euro is ending the week with bullish signals, so a test of the 1.1200 zone over the next sessions seems likely. The mentioned level capped the upside during December and is also where the 55-week simple moving average stands, so a consolidation above could point to more gains. 

It the current bullish strength enough for a break above 1.1200? At the moment, it appears to be a story more related to US dollar’s weakness. The last time the euro traded comfortably above 1.1200 was back in July. 

A failure at current levels would favor a correction, that could intensify if EUR/USD drops below 1.1095 (20-day moving average). 

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