Traders Hope ECB will Change QE Duration

The EUR/USD pair extends gains, confirming the fact that the concerns of investors about political uncertainty in Germany are decreasing. The current market situation proves it. The Social Democrats Party is discussing the possibility of holding talks with Angela Merkel about the possible creation of a minority parliament. This will save the country from organizations of new elections and resolve political uncertainty. Meanwhile, macroeconomic reports indicate a quite calm reaction to the political situation. According to data released by IFQ, the business climate in Germany Onoticeably improved. The index rose to an all-time high of 117.5 in November.

The index of economic expectations demonstrated similar dynamics. Now, traders are sure what currency to buy. The EUR/USD pair broke through the resistance level of 1.1860. Moreover, some analysts expect a strong growth of the euro against the US dollar in 2018. The reason for such forecasts was the publication of the minutes from the ECB meeting held in October. According to the minutes, the ECB officials disagreed on the duration of the quantitative easing program. Such information encouraged those who hope for the QE program winding down in the near future. Therefore, analysts suggest that release of any positive comments on this issue will be enough for the rapid growth of the euro. As a result, amid such an upbeat trading sentiment, the EUR/USD pair is likely to start the new trading week in positive territory.

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