As the ITRE approved the proposed amendments into the Energy Efficiency Directive - the market cheered for a moment. With no sudden buying spree on the market, those who went long before the vote started to empty their inventory.
Please compare how the open interest decreased by some 6m units on just after the vote.
End of business on 27 Feb the Dec12 EUA OI was 642,537,000 units on ICE, whereas on 28 Feb it was 636,841,000 units.
Dec12 EUA finished that day slightly above 9.00 euro, after a high of 9.63 and a low of 8.88.
Last week EUA Dec12 traded down to 8.55 - bouncing of the lower Bollinger band and up to 9.22 euro - upper Bollinger band plus a 23.60 Fibonacci retracement resistance level.
Today we do not foresee much upside potential for the prices. We see the EUA Dec12 trading within a range of 8.61 - 8.94