Tuesday, August 7, 2012

Where is "the thing"

The emissions market is calm recently as the holiday season kicked in in most parts of the EU and beyond. Generally the markets were in a risk-on mood after Germany signalled that the country would support the ECB’s bond buying programme announced last week. This programme could decrease the financing costs of countries like Spain and Italy.

As the auction schedule debate will only start in autumn, traders' attention is now drawn to any short- to mid-term imbalance in supply and demand and seeking direction from oil, gas, power prices and macroeconomic development in the EU.

Looking from a wider perspective, we haven't seen a new low since 5.99 euro was hit at the break of March and April. Carbon is trading sideways inbetween 6.70 and 7.40 euro - and this is not the level of prices at which power companies would spend extra time and effort to closely follow the market and execute complex hedging strategies.

Ahead of us certain technical obstacles which may prevent the price from further appreciation - I mean the 20 Day Moving Average (DMA) which is now being tested, 45 DMA, 30 DMA and 200 DMA.

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