Tuesday, May 22, 2012

Carbon strong ahead of EU summit

Carbon showed some strenght last night breaking above short term resistance levels (short term Moving Averages) and trend lines. See chart below.

This morning the rally continued as stop losses were triggered. Current levels would indicate an overbought market - RSI @ 70, which implies a correction.

However, current levels of 6.80 euro are also Fibo level, which can act as support. At this moment we can say 6.80 passed the "support test" and we can look towards 7.02 - next Fibo level. On the way to get us there we have 20 day moving average @ 6.94 euro (black line on the chart below), which can temporarily halt the rally. Plus the OECD cut its growth forecasts for the Eurozone a couple of minutes ago. (To -0.1% from +0.2% in 2012)

Wonder if the rally and strenght have something to do with the Commission adopting rules on national support for industry electricity costs in context of the EU Emission Trading Scheme ... please read below


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