Tuesday, March 12, 2013

EUA Dec13: No recovery in sight before German decision on back-loading?

It might seem that the EUA Dec13 had a boring day on Friday, but there is (at least) one negative item its performance. It hit a daily low of EUR 4.13, a level last seen Feb. 19. This was the day of the ENVI vote, when MEPs delayed a decision about putting the process of back-loading on fast track because of uncertainty regarding a possible consensus. The last candle on the 10 minutes chart isn't encouraging either. The price closed at the lowest end of the candle indicating that it is not strong enough to recover before the weekend. The range the price traded narrowed to EUR 4.13-4.50 in the last three trading days of last week. The daily candles draw a narrowing triangle and forecast further downwards movement.

On Monday, the EUA Dec13 had a critical day. It opened in a negative mood touching EUR 4.10 in the first 10 minutes of trading compared to Friday's closing price of EUR 4.26. The fall speeded up after the announcement of the EU auction (clearing price was 4 cents below the best bid in the secondary market and bid-to-cover ratio fell below 3). The price fell below EUR 4.00 and hit a daily low of EUR 3.93, a level not seen since Feb. 1.

MACD gave sell sign on March 5. RSI is at 37.2, close to oversold territory. The price approached the lower Bollinger band at EUR 3.60 recently.

The next support level is at EUR 3.85 (a Fibonacci retracement level), followed by the lower Bollinger band, the next Fibonacci retracement level at EUR 3.45 and by EUR 3.22 a local low from . 

Resistance levels are at EUR 4.05 (more a psychological level as the price fell through this level quite easily), EUR 4.30 and EUR 4.52 (30-days moving average).