Anna 
During the Asian trading session on Thursday, the EUR/USD pair exhibited modest strength, reaching a 2.5-week high at 1.0630, building on its recent momentum.
The U.S. dollar (USD) remains on the back foot, as dwindling expectations for further interest rate hikes by the Federal Reserve (Fed) weigh on the currency. This, coupled with an overall positive market risk sentiment, diminishes the appeal of the safe-haven USD, providing tailwinds to EUR/USD. However, traders appear cautious and hesitant to make aggressive moves, opting to wait for the latest U.S. consumer inflation data. This data holds the potential to impact expectations for future Fed interest rate hikes and may offer fresh impetus for EUR/USD.
From a technical standpoint, the 1.0630-1.0635 range represents the upper boundary of a descending channel that has persisted since the 17-month high reached in June. Additionally, it aligns with the 23.6% Fibonacci retracement of the sharp decline witnessed from July to October, reaching levels not seen since December 2022. If EUR/USD continues to exhibit strength, it could signify the establishment of a short-term bottom, potentially paving the way for an extension of the recent rebound from the yearly lows in the 1.0450-1.0445 range observed over the past two weeks.
With daily chart oscillators beginning to show upward momentum, EUR/USD may target the 1.0700 round-figure level for the first time since September 20. This surge may enable further gains, potentially testing the 50-day simple moving average (SMA) around 1.0740, with the subsequent relevant resistance near 1.0765, the 38.2% Fibonacci level. Nevertheless, market sentiment speculates that the European Central Bank (ECB) may refrain from further interest rate hikes for the time being, potentially acting as a barrier at the 1.0765 level.
Conversely, the 1.0600 round figure currently serves as immediate support, with the 1.0565 horizontal zone following closely. This comes after Monday’s weekly low near 1.0520, a response to heightened tensions stemming from an unprecedented attack by the Hamas militant group in Gaza over the weekend. If EUR/USD convincingly falls below the weekly low of 1.0520, bearish sentiment may gain traction, pushing EUR/USD below the psychological 1.0500 level and potentially testing annual lows within the 1.0450-1.0445 range.
